Exhibit 10H
EXECUTION VERSION
CREDIT AGREEMENT (MULTI-YEAR)
Dated as of October 25, 2001
among
AVNET, INC.
and Certain Other Borrowers,
as the Borrowers,
BANK OF AMERICA, N.A.,
as Administrative Agent, Documentation Agent, Letter of Credit Issuer and Swing
Line Lender,
CREDIT SUISSE FIRST BOSTON,
FIRST UNION NATIONAL BANK,
THE BANK OF NOVA SCOTIA, and
ABN AMRO BANK N.V.,
as Joint Syndication Agents,
The Other Lenders Party Hereto, and
BANC OF AMERICA SECURITIES LLC, and
CREDIT SUISSE FIRST BOSTON
as Joint Lead Arrangers and Joint Book Managers
TABLE OF CONTENTS
Section Page
------- ----
Article I. DEFINITIONS AND ACCOUNTING TERMS................................................. 1
1.01 Defined Terms............................................................. 1
1.02 Other Interpretive Provisions............................................. 22
1.03 Accounting Terms.......................................................... 22
1.04 Rounding.................................................................. 23
1.05 References to Agreements and Laws......................................... 23
1.06 Exchange Rates; Currency Equivalents...................................... 23
1.07 Additional Alternative Currencies......................................... 23
1.08 Redenomination of Certain Alternative Currencies.......................... 24
Article II. THE COMMITMENTS AND CREDIT EXTENSIONS........................................... 24
2.01 Committed Loans........................................................... 24
2.02 Borrowings, Conversions and Continuations of Committed Loans.............. 25
2.03 Swing Line Loans.......................................................... 27
2.04 Letters of Credit......................................................... 29
2.05 Prepayments............................................................... 36
2.06 Reduction or Termination of Commitments................................... 37
2.07 Repayment of Loans........................................................ 37
2.08 Interest.................................................................. 37
2.09 Fees...................................................................... 38
2.10 Computation of Interest and Fees.......................................... 40
2.11 Evidence of Debt.......................................................... 41
2.12 Payments Generally........................................................ 41
2.13 Sharing of Payments....................................................... 43
2.14 Increase in Commitments................................................... 44
Article III. TAXES, YIELD PROTECTION AND ILLEGALITY......................................... 45
3.01 Taxes..................................................................... 45
3.02 Illegality................................................................ 46
3.03 Inability to Determine Rates.............................................. 46
3.04 Increased Cost and Reduced Return; Capital Adequacy....................... 47
3.05 Funding Losses............................................................ 47
3.06 Matters Applicable to all Requests for Compensation....................... 48
3.07 Survival.................................................................. 48
Article IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS....................................... 48
4.01 Conditions of Initial Credit Extension.................................... 48
4.02 Conditions to all Credit Extensions....................................... 50
Article V. REPRESENTATIONS AND WARRANTIES................................................... 50
5.01 Corporate Existence and Power............................................. 50
5.02 Corporate and Governmental Authorization; No Contravention................ 50
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5.03 Binding Effect............................................................ 51
5.04 Financial Information..................................................... 51
5.05 Litigation................................................................ 51
5.06 Compliance with ERISA, Taxes.............................................. 51
5.07 Environmental Matters..................................................... 52
5.08 Disclosure................................................................ 53
5.09 Subsidiaries.............................................................. 54
5.10 Not an Investment Company................................................. 54
5.11 Margin Stock.............................................................. 54
5.12 Compliance With Laws...................................................... 54
5.13 No Material Adverse Change................................................ 54
5.14 Absence of Liens and Encumbrances......................................... 54
5.15 Debt...................................................................... 54
5.16 Contingent Liabilities.................................................... 54
5.17 Investments............................................................... 54
Article VI. COVENANTS....................................................................... 55
6.01 Information............................................................... 55
6.02 Payment of Obligations.................................................... 57
6.03 Maintenance of Property; Insurance........................................ 57
6.04 Conduct of Business and Maintenance of Existence.......................... 58
6.05 Compliance with Laws...................................................... 58
6.06 Inspection of Property, Books and Records................................. 58
6.07 Negative Pledge........................................................... 59
6.08 Consolidations, Mergers and Sales of Assets............................... 60
6.09 Use of Proceeds........................................................... 60
6.10 Organizational Documents.................................................. 60
6.11 Financial Covenants....................................................... 60
6.12 Limitations on Funded Debt................................................ 61
6.13 Pari Passu................................................................ 61
6.14 Investments............................................................... 61
6.15 Capital Expenditures...................................................... 63
Article VII. EVENTS OF DEFAULT.............................................................. 63
7.01 Events of Default......................................................... 63
7.02 Remedies Upon Event of Default............................................ 66
Article VIII. ADMINISTRATIVE AGENT.......................................................... 66
8.01 Appointment and Authorization of Administrative Agent..................... 66
8.02 Delegation of Duties...................................................... 67
8.03 Liability of Administrative Agent......................................... 67
8.04 Reliance by Administrative Agent.......................................... 67
8.05 Notice of Default......................................................... 68
8.06 Credit Decision; Disclosure of Information by Administrative Agent........ 68
8.07 Indemnification of Administrative Agent................................... 69
8.08 Administrative Agent in its Individual Capacity........................... 69
8.09 Successor Administrative Agent............................................ 70
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8.10 Other Agents; Lead Managers............................................... 70
Article IX. MISCELLANEOUS................................................................... 70
9.01 Amendments, Etc........................................................... 70
9.02 Notices and Other Communications; Facsimile Copies........................ 72
9.03 No Waiver; Cumulative Remedies............................................ 73
9.04 Attorney Costs, Expenses and Taxes........................................ 73
9.05 Indemnification by Avnet.................................................. 73
9.06 Payments Set Aside........................................................ 74
9.07 Successors and Assigns.................................................... 74
9.08 Confidentiality........................................................... 77
9.09 Collateral................................................................ 78
9.10 Addition of Designated Borrowers.......................................... 78
9.11 Set-off................................................................... 79
9.12 Interest Rate Limitation.................................................. 79
9.13 Counterparts.............................................................. 79
9.14 Integration............................................................... 79
9.15 Survival of Representations and Warranties................................ 80
9.16 Severability.............................................................. 80
9.17 Tax Forms................................................................. 80
9.18 Removal and Replacement of Lenders........................................ 81
9.19 Governing Law............................................................. 82
9.20 Waiver of Right to Trial by Jury.......................................... 82
9.21 Judgment Currency......................................................... 83
SIGNATURES S-1
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SCHEDULES
1.01(m) Mandatory Cost Rate
1.01(n) Non-Core Subsidiaries/Divisions
2.01 Commitments and Pro Rata Shares
5.05 Litigation
5.06 ERISA Matters
5.07 Environmental Matters
5.09 Subsidiaries
5.12 Compliance Matters
5.15 Existing Debt
5.17 Existing Investments
6.07 Existing Liens
9.02 Eurocurrency and Domestic Lending Offices, Addresses for Notices
EXHIBITS
FORM OF
A Committed Loan Notice
B Committed Loan Note
C Swing Line Loan Notice
D Swing Line Note
E Compliance Certificate
F Assignment and Assumption Agreement
G Guaranty
H Designated Borrower Certificate
I Avnet Counsel Opinion Content
J Joinder Agreement
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CREDIT AGREEMENT (MULTI-YEAR)
This CREDIT AGREEMENT ("Agreement") is entered into as of October 25,
2001, among AVNET, INC., certain Subsidiaries of Avnet, Inc. that from time to
time become a party hereto pursuant to Section 9.10, (each a "Designated
Borrower" and, together with Avnet, Inc., the "Borrowers" and each a
"Borrower"), each lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), and BANK OF AMERICA, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender.
Avnet has requested that the Lenders provide a revolving credit facility,
and the Lenders are willing to do so on the terms and conditions set forth
herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Acquisition" has the meaning specified in Section 6.14(h).
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means, with respect to any currency, the
Administrative Agent's address and, as appropriate, account as set forth on
Schedule 9.02 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to Avnet and the Lenders.
"Affiliate" means, with respect to any designated Person, any other Person
that has a relationship with the designated Person whereby either of such
Persons directly or indirectly controls or is controlled by or is under common
control with the other of such Persons. The term "control" means the possession,
directly or indirectly, of the power, whether or not exercised, to direct or
cause the direction of the management or policies of any Person, whether through
ownership of voting securities, by contract or otherwise.
"Agent/Arranger Fee Letter" has the meaning specified in Section 2.09(c).
"Agent-Related Persons" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, the
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Commitments" has the meaning set forth in the definition of
"Commitment."
"Agreement" means this Credit Agreement.
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"Alternative Currency" means each of Euro, Sterling, SFr., SEK, and each
other lawful currency (other than Dollars) that is freely available and freely
transferable and convertible into Dollars and that is approved by all the
Lenders in accordance with Section 1.07.
"Alternative Currency Equivalent" means, at any time, with respect to any
amount denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent at such time on
the basis of the Spot Rate (determined in respect of the most recent Revaluation
Date) for the purchase of such Alternative Currency with Dollars.
"Applicable Currency" has the meaning specified in Section 3.02.
"Applicable Rate" means, from time to time, the following percentages per
annum, based upon the Debt Rating as set forth below:
APPLICABLE RATE
Eurocurrency
Rate Loans
& Letters Base Rate
Category Debt Ratings Facility Fee of Credit Loans
-------- ------------ ------------ --------- -----
1 A/A2 or better 0.080% 0.445% 0.000%
2 A-/A3 0.100% 0.525% 0.000%
3 BBB+/Baa1 0.125% 0.625% 0.000%
4 BBB/Baa2 0.150% 0.725% 0.000%
5 Lower than 0.175% 0.825% 0.000%
BBB/Baa2
For purposes of the foregoing, (i) the Applicable Rate initially shall be
determined based upon the Debt Rating specified in the certificate delivered
pursuant to Section 4.01(a)(vi); (ii) if no Debt Rating for any Long-Term Debt
of Avnet shall be available from either Xxxxx'x or S&P, such rating agency shall
be deemed to have established a Debt Rating for the Long-Term Debt of Avnet
which is one Category higher than that pertaining to the subordinated debt
rating grade of Avnet (with Category 1 being the highest and Category 5 being
the lowest), (iii) if no Debt Rating for any Long-Term Debt or subordinated debt
of Avnet shall be available from either Xxxxx'x or S&P, the Applicable Rate
shall be as set forth in Category 5, (iv) if the Debt Ratings established or
deemed to have been established by Xxxxx'x and S&P shall fall within different
Categories, the Applicable Rate shall be based upon the lower Category, and (v)
if any Debt Rating established or deemed to have been established by Xxxxx'x or
S&P shall be changed (other than as a result of a change in the rating system of
either Xxxxx'x or S&P), such change shall be effective as of the date on which
such change is first announced by the rating agency making such change. Each
such change shall apply to all Eurocurrency Rate Loans that are outstanding, and
all Facility Fees that accrue, at any time during the period commencing on the
effective date of
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such change and ending on the date immediately preceding the effective date of
the next such change. If the rating system of either Xxxxx'x or S&P shall change
prior to the Maturity Date, Avnet and the Lenders shall negotiate in good faith
to amend the references to specific ratings in this definition to reflect such
changed rating system. As used herein, "Debt Rating" means, as of any date of
determination, the rating as determined by either S&P or Xxxxx'x (collectively,
the "Debt Ratings") of Avnet's applicable debt.
"Applicant Borrower" has the meaning specified in Section 9.10.
"Arranger" means Banc of America Securities LLC, in its capacity as lead
arranger and book manager.
"Asset Sale" means any sale, lease or other disposition (including any
such transaction effected by way of merger, amalgamation or consolidation) by
Avnet or any of its Subsidiaries subsequent to the date hereof of any asset
(including stock), including any Sale-Leaseback Transaction, whether or not
involving a Capital Lease, but excluding (a) any sale, lease or other
disposition of inventory in the ordinary course of business, (b) any sale, lease
or other disposition of raw materials, supplies or other non-fixed tangible
assets in the ordinary course of business, (c) any (i) sale, lease or other
disposition of surplus, obsolete or worn out machinery, equipment, molds or
other manufacturing equipment in the ordinary course of business or (ii) the
disposition of any other asset (but not including the disposition of assets
otherwise mentioned in this paragraph and not including Permitted Receivables),
to the extent that the aggregate book value of all of such assets sold, leased
or otherwise disposed of under this clause (c) in a fiscal year does not exceed
5% of the total assets of Avnet and its Consolidated Subsidiaries on a
consolidated basis, (d) any sale, lease or other disposition to Avnet or any
Wholly-Owned Consolidated Subsidiary of Avnet, (e) any sale or other disposition
in the ordinary course of business of readily marketable securities, (f) any
disposition of cash not prohibited hereunder, (g) the sale of the stock or the
assets of any Non-Core Subsidiary or the assets of any Non-Core Division, and
(h) any disposition of rights in or to a Permitted Hedge Transaction pursuant to
an unwind or termination of such transaction.
"Assignment and Assumption Agreement" means an Assignment and Assumption
Agreement substantially in the form of Exhibit F.
"Attributable Indebtedness" means, on any date, (a) in respect of any
Permitted Securitization, an amount equal to (i) the outstanding principal
amount of Debt incurred at such time by the Securitization Subsidiary, or (ii)
if the Securitization Subsidiary has incurred no such Debt, the unrecovered
purchase price of all Permitted Receivables (or interest therein) sold or
transferred by such Securitization Subsidiary to the conduit entity or other
receivables credit provider relating to such Permitted Securitization, and (b)
in respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP if such
lease were accounted for as a capital lease.
"Attorney Costs" means and includes all fees and disbursements of any law
firm or other external counsel and the allocated cost of internal legal services
and all disbursements of internal counsel.
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"Audited Financial Statements" means the audited consolidated balance
sheet of Avnet and its Subsidiaries for the fiscal year ended June 29, 2001, and
the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year of Avnet and its Subsidiaries.
"Avnet" means Avnet, Inc., a New York corporation.
"Bank of America" means Bank of America, N.A.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Committed Loan" means a Committed Loan that is a Base Rate
Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
All Base Rate Loans shall be denominated in Dollars.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrower" and "Borrowers" each have the meaning specified in the
introductory paragraph hereto.
"Borrowing" means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office with respect to
Obligations denominated in Dollars is located and (a) if such day relates to any
Eurocurrency Rate Loan denominated in a currency other than Euro, means any such
day on which dealings in deposits in the relevant currency are conducted by and
between banks in the London interbank market or (b) if such day relates to any
Eurocurrency Rate Loan denominated in Euro, means a TARGET Day.
"Capital Expenditures" means, in respect of Avnet and its Subsidiaries on
a consolidated basis, as of any date for the four Fiscal Quarter period ending
on such date, without duplication, the difference (to the extent positive), as
determined in accordance with GAAP, between (a) capital expenditures of such
Persons for such period less (b) the net cash proceeds received by such Persons
during such period from the disposition of capital assets.
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"Capital Lease" means a lease that would be capitalized on a balance sheet
of the lessee prepared in accordance with GAAP.
"Capitalized Lease Indebtedness" means indebtedness incurred pursuant to a
Capital Lease.
"Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term shall have corresponding meaning. The Borrower hereby
grants the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, a Lien on all such cash and deposit account balances. Cash Collateral
shall be maintained in blocked, non-interest bearing deposit accounts at Bank of
America or other institutions satisfactory to it.
"Change of Control" means, with respect to any Person, an event or series
of events by which:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such Person or its subsidiaries, or any Person
acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except that a person shall be deemed to have "beneficial ownership"
of all securities that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of 25% or more of the equity interests of such
Person; or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
such Person cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body
was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" means, as to each Lender, its obligation to (a) make
Committed Loans to the Borrowers pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one
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time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01, as such amount may be reduced or adjusted from time to time in
accordance with this Agreement (collectively, the "Aggregate Commitments").
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type, in the same currency and having the same
Interest Period made by each of the Lenders pursuant to Section 2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Note" means a promissory note made by a Borrower in favor
of a Lender evidencing Committed Loans made by such Lender, substantially in the
form of Exhibit B.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Committed Loans as the same Type, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit E.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of Avnet in its
consolidated financial statements if such statements were prepared as of such
date.
"Credit Extension" means each of the following: (a) a Committed Borrowing,
(b) a Swing Line Borrowing, and (c) an L/C Credit Extension.
"Debt" of any Person means at any date, without duplication (i.e., in
calculating the Debt of Avnet and its Consolidated Subsidiaries at any time for
purposes of any financial covenant, without counting the Guarantee by any such
Person of the Debt of any other such Person), (a) all obligations of such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable and accrued expenses arising in the ordinary course of
business, (d) all Capitalized Lease Indebtedness, and all Attributable
Indebtedness in respect of any Synthetic Lease Obligations, (e) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person (to the extent of the lesser of the amount of such
Debt and the book value of any assets subject to such Lien), (f) the maximum
amount available to be drawn under all outstanding standby letters of credit or
acceptances issued or created for the account of such Person, (g) to the extent
of any Maturing Amount thereof, any Preference Stock, and (h) all Debt of others
Guaranteed by such Person (to the extent of the lesser of the amount of such
Debt Guaranteed or the amount of such Guarantee). The Debt of any Person shall
exclude trade accounts payable and accrued expenses arising in the ordinary
course of such Person's business.
"Debt Rating" has the meaning specified in the definition of "Applicable
Rate."
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"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.
"Default" means any event that, with the giving of any notice, the passage
of time, or both, would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurocurrency Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Designated Borrower" means any Applicant Borrower that becomes a Borrower
party hereto in accordance with Section 9.10.
"Designated Borrower Certificate" means a Designated Borrower Certificate
substantially in the form of Exhibit H.
"Dollar" and "$" means lawful money of the United States of America.
"Dollar Equivalent" means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent at such time on the basis of
the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of Dollars with such Alternative Currency.
"EBITDA" means, in respect of Avnet and its Subsidiaries on a consolidated
basis, as of any date for the four Fiscal Quarter period ending on such date,
without duplication, the sum of (a) Net Income, plus (b) an amount which, in the
determination of Net Income, has been deducted for (i) Interest Expense, (ii)
income taxes, (iii) depreciation and amortization expense and (iv) extraordinary
items consisting of non-cash losses or non-recurring non-cash losses, minus (c)
an amount which, in the determination of Net Income for such period, has been
included for (i) extraordinary items consisting of gains and (ii) gains on the
sale or other disposition of assets, plus (d) cash related one-time charges
recorded to Avnet's income statement during the Fiscal Quarter ending nearest
June 30, 2001 in an aggregate amount not to exceed $146,000,000 relating to (i)
the merger of Kent Electronics Corporation with and into Avnet pursuant to an
Amended and Restated Merger Agreement and Plan of Merger dated as of March 21,
2001 and (ii) other restructuring activities.
"Eligible Assignee" has the meaning specified in Section 9.07(h).
"EMU" means the economic and monetary union in accordance with the Treaty
of Rome 1957, as amended by the Single Xxxxxxxx Xxx 0000, the Maastricht Treaty
of 1992 and the Amsterdam Treaty of 1998, as amended from time to time.
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"EMU Legislation" means the legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the "euro" or otherwise).
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, regulations, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions or policies, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Superfund Amendments and Reauthorization Act, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Clean Air Act and the Clean
Water Act, relating to the environment or to emissions, discharges or releases
of pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment
(including, ambient air, surface water, ground water or land) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means Avnet and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Avnet, are treated as a single employer
under Section 414 of the Code.
"Euro" means the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.
"Eurocurrency Base Rate" has the meaning set forth in the definition of
Eurocurrency Rate.
"Eurocurrency Rate" means (a) for any Interest Period with respect to any
Eurocurrency Rate Loan other than one referred to in subsection (b) of this
definition, a rate per annum determined by the Administrative Agent pursuant to
the following formula:
Eurocurrency Rate = Eurocurrency Base Rate
--------------------------------------
1.00 - Eurocurrency Reserve Percentage
Where,
"Eurocurrency Base Rate" means, for such Interest Period:
(i) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen that displays an average British Bankers Association
Interest Settlement Rate for deposits in the relevant currency (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
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(ii) in the event the rate referenced in the preceding clause (i)
does not appear on such page or service or such page or service shall
cease to be available, the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate on such other page or
other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or
(iii) in the event the rates referenced in the preceding subsections
(i) and (ii) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in the
relevant currency for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurocurrency Rate Loan
being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America's
London Branch (or London Affiliate) to major banks in the London interbank
market for such currency at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such Interest
Period; and
"Eurocurrency Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal, carried
out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by
the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurocurrency Rate for each outstanding Eurocurrency
Rate Loan shall be adjusted automatically as of the effective date of any
change in the Eurocurrency Reserve Percentage.
(b) For any Interest Period with respect to any Eurocurrency Rate Loan
advanced by a Lender required to comply with the relevant requirements of the
Bank of England and the Financial Services Authority of the United Kingdom, the
sum of (i) the rate determined in accordance with subsection (a) of this
definition and (ii) the Mandatory Cost Rate for such Interest Period.
"Eurocurrency Rate Loan" means a Committed Loan that bears interest at a
rate based on the Eurocurrency Rate.
"Event of Default" has the meaning specified in Section 7.01.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for
9
such day shall be the average rate charged to Bank of America on such day on
such transactions as determined by the Administrative Agent.
"Final Leverage Fee Period" has the meaning specified in Section
2.09(c)(iii).
"Fiscal Quarter" means a fiscal quarter of Avnet.
"Foreign Lender" has the meaning specified in Section 9.17(a).
"Foreign Subsidiary" means any Subsidiary organized under the laws of
jurisdiction outside the United States of America.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Funded Debt" means, with respect to any Person, without duplication
(i.e., in calculating the Funded Debt of Avnet and its Consolidated Subsidiaries
at any time, without counting the Guarantee by any such Person of the Funded
Debt of any other such Person), (a) all Debt of such Person other than any Debt
of the type referred to in clause (g) or (h) of the definition of "Debt" set
forth in this Section 1.01 and (b) all Funded Debt of others Guaranteed by such
Person (to the extent of the lesser of the amount of such Funded Debt Guaranteed
or the amount of such Guarantee).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied.
"Government" means the federal government of the United States of America
or any agency thereof.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the
10
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsement for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guarantying Person in good faith. "Guaranteed" shall have a corollary meaning.
"Guarantor" means Avnet.
"Guaranty Agreement" means a guaranty agreement substantially in the form
of Exhibit G executed by the Guarantor in favor of the Administrative Agent and
the Lenders pursuant to Section 9.10.
"Hazardous Substance" means any toxic or hazardous substance, including
petroleum and its derivatives, presently regulated under the Environmental Laws.
"Indemnified Liabilities" has the meaning set forth in Section 9.05.
"Indemnitees" has the meaning set forth in Section 9.05.
"Intangible Assets" shall mean, as of the date of any determination
thereof, the total amount of all assets of Avnet and its Subsidiaries on a
consolidated basis consisting of goodwill, patents, tradenames, trademarks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred assets (other than prepaid insurance and
prepaid taxes), the excess of cost of shares acquired over book value of related
assets and such other assets as are properly classified as "intangible assets"
in accordance with GAAP.
"Interest Expense" means, for the period of computation, the aggregate
amount of interest on a consolidated basis accruing on Debt and all amortization
of debt discount and expense on Debt (including any obligation to pay rent in
respect of Capital Leases) of Avnet and its Subsidiaries on a consolidated basis
in conformity with GAAP; provided that in the event of the consummation of any
Permitted Securitization, "Interest Expense" shall be adjusted to include
(without duplication) an amount equal to the interest (or other fees in the
nature of interest or discount) accrued and paid or payable in cash for such
computation period by the applicable Securitization Subsidiary to the conduit
entity or other receivables credit provider relating to such Permitted
Securitization.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurocurrency
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
"Interest Period" means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and, in the case of any such Borrowing
prior to the 31st day after the
11
Closing Date, ending one week thereafter or having such other ending date as may
be satisfactory to the Administrative Agent, or in the case of any Borrowing on
or after such 31st day, ending on the date one, two, three, four or six months
thereafter, as selected by Avnet in the applicable Committed Loan Notice;
provided that:
(i) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless, in the case of a Eurocurrency Rate Loan, such Business Day falls
in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day;
(ii) any Interest Period pertaining to a Eurocurrency Rate Loan
that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Scheduled Maturity
Date.
"Investment" means, as to any Person, any acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance or
capital contribution to, guaranty of debt of, or purchase or other acquisition
of any other debt or equity participation or interest in, another Person,
including any partnership or joint venture interest in such other Person, or (c)
the purchase or other acquisition (in one transaction or a series of
transactions) of assets of another Person that constitute a business unit. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.
"IRS" means the United States Internal Revenue Service.
"Joinder Agreement" means a Joinder Agreement in substantially the form of
Exhibit J.
"Judgment Currency" has the meaning specified in Section 9.21.
"Judgment Currency Conversion Date" has the meaning specified in Section
9.21.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's
participation in any L/C Borrowing in accordance with its Pro Rata Share.
12
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit that has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn face amount of all outstanding Letters of Credit plus the aggregate of
all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer and the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such on Schedule 9.02, or such other office or offices as a
Lender may from time to time notify Avnet and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days prior
to the Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day).
"Letter of Credit Sublimit" means an amount equal to the lesser of the
Aggregate Commitments and $50,000,000. The Letter of Credit Sublimit is a part
of, and not in addition to, the Aggregate Commitments.
"Leverage Ratio" means, as of any date of determination, in respect of
Avnet and its Subsidiaries, the ratio (expressed as a percentage) of (a) Funded
Debt as of such date to (b) Total Capitalization, calculated on a consolidated
basis in accordance with GAAP; provided, however, that in the event of the
consummation of any Permitted Securitization, Funded Debt and Total
Capitalization shall each be adjusted to include (without duplication)
Attributable Indebtedness of any Securitization Subsidiary outstanding at such
time.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, Avnet or any Subsidiary of Avnet shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sales agreement,
Capital Lease or other title retention agreement relating to such asset.
"Loan" means an extension of credit by a Lender to the Borrowers under
Article II in the form of a Committed Loan or a Swing Line Loan.
13
"Loan Documents" means this Agreement, each Note, the Agency/Arranger Fee
Letter, each Request for Credit Extension, each Compliance Certificate, each
Designated Borrower Certificate, the Guaranty Agreement and each Joinder
Agreement.
"Loan Parties" means, collectively, Avnet, each Designated Borrower and
each Guarantor.
"Long-Term Debt" means, at any time, in respect of Avnet, any
publicly-held senior unsecured debt obligations outstanding at such time with a
maturity more than one year after the date of any determination hereunder.
"Mandatory Cost Rate" means, with respect to any period, a rate per annum
determined in accordance with Schedule 1.01(m).
"Mandatory Cost Reference Lender" means each of Bank of America or any of
its Affiliates.
"Margin Stock" has the meaning assigned to such term in Regulation U of
the FRB.
"Material Plan" means, at any time, a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000 at such time.
"Material Subsidiary" means any direct or indirect Subsidiary of Avnet
which as of the end of any Fiscal Quarter after the Closing Date has total
assets (as determined in accordance with GAAP) equal to or greater than 2% of
the total assets of Avnet and its Consolidated Subsidiaries at such time.
"Maturing Amount" means, with respect to any Preference Stock, an amount
equal to the aggregate amount of such Preference Stock that will or may become
due before the Scheduled Maturity Date as a result of any scheduled maturity,
amortization or mandatory redemption thereof.
"Maturity Date" means (a) October 25, 2004 or such later date to which the
termination date of the Aggregate Commitments may be extended in accordance with
the terms hereof (the "Scheduled Maturity Date"), or (b) such earlier date upon
which the Aggregate Commitments may be terminated in accordance with the terms
hereof.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor thereto.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Income" means, as of any date for the four Fiscal Quarter period
ending on such date with respect to Avnet and its Subsidiaries on a consolidated
basis, net income (excluding
14
extraordinary items) after Interest Expense, income taxes and depreciation and
amortization, all as determined in accordance with GAAP.
"Net Worth" means, at any time, consolidated net shareholders' equity of
Avnet and its Subsidiaries, determined in accordance with GAAP, with no upward
adjustments due to a revaluation of assets; provided, however, that there shall
be disregarded for this purpose the effect of any write-down of goodwill
undertaken pursuant to FAS 142 on or before December 31, 2001 not to exceed
$700,000,000 in the aggregate.
"Non-Core Division" means each division of Avnet designated as a "Non-Core
Division" on Schedule 1.01(n) hereof.
"Non-Core Subsidiary" means each Subsidiary of Avnet designated as a
"Non-Core Subsidiary" on Schedule 1.01(n) hereof.
"Notes" means, collectively, the Committed Loan Notes and the Swing Line
Notes.
"Obligation Currency" has the meaning set forth in Section 9.21.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest that accrues after the commencement by or against any Loan
Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws
naming such Person as the debtor in such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the articles of formation and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect thereto
filed in connection with its formation with the secretary of state or other
department in the state of its formation, in each case as amended from time to
time.
"Outstanding Amount" means, (i) with respect to Committed Loans and Swing
Line Loans on any date, the aggregate outstanding principal Dollar Equivalent
amount thereof after giving effect to any borrowings and prepayments or
repayments of Committed Loans and Swing Line Loans, as the case may be,
occurring on such date; and (ii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of Credit
or any reduction in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"Overnight Rate" means, for any day, (a) with respect to any amount
denominated in Dollars, the Federal Funds Rate and (b) with respect to any
amount denominated in an Alternative Currency, the rate of interest per annum at
which overnight deposits in the applicable Alternative Currency, in an amount
approximately equal to the amount with respect to which
15
such rate is being determined, would be offered for such day by a branch or
Affiliate of Bank of America located in the applicable interbank market for such
currency to major banks in such interbank market.
"Parent" means, with respect to any Lender, any Person as to which such
Lender is a Subsidiary.
"Participant" has the meaning specified in Section 9.07(d).
"Participating Member State" means each state so described in any EMU
Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Hedge Transaction" has the meaning set forth in Section
6.14(j).
"Permitted Investments" means, (a) with respect to Avnet and its
Subsidiaries (other than the Foreign Subsidiaries):
(i) cash and demand deposits;
(ii) investments in direct obligations of the Government of the
United States of America or any agency or instrumentality thereof or any
obligations guaranteed by the full faith and credit of the Government of
the United States of America, in each case maturing within 360 days after
the date of investment therein;
(iii) commercial paper in an aggregate amount of up to $25,000,000
per issuer outstanding at any time, issued by any corporation organized in
any State of the United States of America, rated at least "A-1" (or the
then equivalent grade) by S&P or "P-1" (or the then equivalent grade) by
Moody's, or the successor of either of them;
(iv) Dollar denominated certificates of deposit of, eurodollar
certificates of deposit of, bankers acceptances of, or time deposits with,
any Lender or any commercial bank, the short-term securities of which (or
the short-term securities of its Parent or any of its Affiliates) are
rated at least "A-1" (or the then existing equivalent) by S&P or at least
"P-1" (or the then existing equivalent) by Moody's or which has a bank
rating of at least "C" (or the then existing equivalent) by Thomson Bank
Watch and in each case maturing within 360 days after the date of
purchase, acceptance or deposit;
(v) tax-free money market funds rated at least "A" (or the then
equivalent grade) by S&P or Moody's, or the successor of either of them;
(vi) taxable or tax-exempt money market preferred stock funds rated
at least "A" (or the then equivalent grade) by S&P or Moody's, or the
successor of either of them;
16
(vii) tax-exempt variable rate demand notes backed by municipal
bonds (low floaters) supported by a letter of credit from a commercial
bank rated at least "AA" (or the then equivalent grade) by S&P or Moody's,
or the successor of either of them;
(viii) asset-backed securities rated at least "A" (or the then
equivalent grade) by S&P or Moody's, or the successor or either of them,
maturing in 90 days or less, with a maximum investment of $10,000,000;
(ix) asset-backed certificates of participation with a long-term
rating of at least "A" (or the then equivalent grade) or a short term
rating of no less than "A-1" by S&P or "P-1" by Moody's, or the successor
of either of them, with an interest accrual period of 90 days or less
which certificates are deemed to be automatically tendered at par at the
end of each interest accrual period;
(x) municipal notes maturing in six months or less and rated at
least SP-2 (or the then equivalent grade) by S&P, or its successor, or at
least "Mig 2" (or the then equivalent grade) by Moody's, or its successor;
and
(xi) other loans, advances and investments by Avnet and each
Subsidiary provided that the sum of all such loans, advances and
investments does not exceed $10,000,000; and
(b) with respect to any Foreign Subsidiary:
(i) any of the investments permitted by clause (a) above,
(ii) obligations of the national government of the country in which
such Foreign Subsidiary maintains its chief executive office and principal
place of business provided such country is a member of the Organization
for Economic Cooperation and Development, in each case maturing within 360
days after the date of investment therein;
(iii) certificates of deposit of, bankers acceptances of, or time
deposits with, any commercial bank which is organized and existing under
the laws of the country in which such Foreign Subsidiary maintains its
chief executive office and principal place of business provided such
country is a member of the Organization for Economic Cooperation and
Development, and the short-term securities of which (or the short-term
securities of its Parent or any of its Affiliates) are rated at least
"A-1" (or the then existing equivalent) by S&P or at least "P-1" (or the
then existing equivalent) by Xxxxx'x, or which has a bank rating of at
least "C" (or the then existing equivalent) by Thomson Bank Watch, and in
each case maturing within 360 days after the date of purchase, acceptance
or deposit; and
(iv) the equivalent of demand deposit accounts which are interest
bearing.
"Permitted Receivables" means accounts receivable (including notes,
chattel paper, accounts, instruments and general intangibles consisting of
rights to payment) generated by Avnet or any of its Subsidiaries (each, an
"originator") in the ordinary course of business, together with any guarantees,
insurance, letters of credit, collateral, service contracts and other
17
agreements associated with any account receivable, the interest of the
originator in the inventory and goods, including returned or repossessed
inventory or goods, if any, the sale, financing or lease of which gave rise to
an account receivable, the interest of the Securitization Subsidiary in the
agreement with the originator pursuant to which such Securitization Subsidiary
purchased such accounts receivable, and other ancillary rights of the originator
arising in connection with the transaction giving rise to such accounts
receivable and all business records relating thereto.
"Permitted Securitization" means (a) transfers constituting sales under
GAAP and accompanied by the delivery of a customary true-sale opinion given by
independent counsel, to a Securitization Subsidiary of Permitted Receivables by
the applicable originator; and (b) if applicable, the incurrence by the
Securitization Subsidiary of Attributable Indebtedness to a conduit entity or
other receivables credit provider secured by a Lien on any or all of the assets
of such Securitization Subsidiary.
"Person" means any individual, trustee, corporation, general partnership,
limited partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture,
Governmental Authority or other legal entity.
"Plan" means at any time an employee pension benefit plan as defined in
Subsection 3(2) of ERISA (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Preference Stock" means, with respect to any issuer, capital stock of
such issuer which under the Organizational Documents of such issuer is entitled
to a preference over any other capital stock of such issuer as to payment of
dividends and/or distributions upon the voluntary or involuntary liquidation of
such issuer.
"Prior Credit Facilities" means, collectively, (a) that certain Second
Amended and Restated Credit Agreement, dated as of September 26, 1997, among
Avnet, certain Subsidiaries of Avnet, the several financial institutions from
time to time party thereto and Bank of America (successor in interest by merger
with NationsBank, N.A.), as agent, as amended prior to the Closing Date, and (b)
that certain 364-Day Credit Agreement, dated as of October 27, 2000, among
Avnet, certain Subsidiaries of Avnet, the several financial institutions from
time to time party thereto and Bank of America, as administrative agent, as
amended prior to the Closing Date.
"Pro Rata Share" means, with respect to each Lender, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments set forth
opposite the name of such Lender on Schedule 2.01, as such share may be adjusted
as contemplated herein.
"Register" has the meaning specified in Section 9.07(c).
"Regulation T" means Regulation T of the FRB.
18
"Regulation U" means Regulation U of the FRB.
"Regulation X" means Regulation X of the FRB.
"Release" has the meaning specified in Section 5.07(a).
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.
"Required Lenders" means, as of any date of determination, Lenders whose
Voting Percentages aggregate more than 50%.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Revaluation Date" means each of the following: (a) each date of a
Borrowing of Eurocurrency Rate Loans denominated in an Alternative Currency, (b)
each date of a continuation of Eurocurrency Rate Loans denominated in an
Alternative Currency pursuant to Section 2.02; and (c) such additional dates as
the Administrative Agent or the Required Lenders shall specify.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or any successor thereto.
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by Avnet or any of its Subsidiaries of any property
that (or of any property similar to and used for substantially the same purposes
as any other property that) has been or is to be sold, assigned, transferred or
otherwise disposed of by Avnet or any of its Subsidiaries to such Person with
the intention of entering into such lease.
"Same Day Funds" means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in the relevant Alternative Currency.
"Scheduled Maturity Date" has the meaning specified in the definition of
"Maturity Date."
"Securitization Subsidiary" means a wholly-owned Subsidiary of Avnet
created solely for purposes of effectuating a Permitted Securitization, the
activities and assets of which are limited
19
solely to such purpose and assets, and the Organization Documents of which
contain customary bankruptcy - remote provisions.
"SEK" means the lawful currency of Sweden.
"SFr." means the lawful currency of Switzerland.
"Special Notice Currency" means at any time an Alternative Currency, other
than the currency of Japan or of a country that is located in North America or
Europe and that is a member of the Organization for Economic Cooperation and
Development at such time.
"Spot Rate" for a currency means the rate quoted by Bank of America as the
spot rate for the purchase by Bank of America of such currency with another
currency through its principal foreign exchange trading office at approximately
8:00 a.m., San Francisco time, on the date two Business Days prior to the date
as of which the foreign exchange computation is made.
"Sterling" means the lawful currency of the United Kingdom.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interest having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at such time directly or indirectly owned by such Person.
"Swing Line" means the revolving credit facility made available to Avnet
by the Swing Line Lender pursuant to Section 2.03.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant to
Section 2.03.
"Swing Line Lender" means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.03(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant
to Section 2.03(b), which, if in writing, shall be substantially in the form of
Exhibit C.
"Swing Line Note" means a promissory note made by Avnet in favor of the
Swing Line Lender evidencing Swing Line Loans made by such Lender, substantially
in the form of Exhibit D.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$65,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such
20
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"Tangible Net Worth" means Net Worth minus all Intangible Assets.
"TARGET Day" means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) System (or, if such clearing system
ceases to be operative, such other clearing system (if any) determined by the
Administrative Agent to be a suitable replacement) is operating.
"Term Loan Agreement" means that certain Credit Agreement (Term Loans), of
even date herewith, among Avnet, certain of its Subsidiaries, the several
financial institutions from time to time party thereto and Bank of America, as
administrative agent for itself and the other lenders party thereto.
"364-Day Credit Agreement" means that certain Credit Agreement (364-Day),
of even date herewith, among Avnet, certain of its Subsidiaries, the several
financial institutions from time to time party thereto and Bank of America, as
administrative agent for itself and the other lenders party thereto.
"Total Capitalization" means, in respect of Avnet and its Subsidiaries,
the sum of Net Worth plus Funded Debt.
"Type" means, with respect to a Committed Loan, its character as a Base
Rate Loan or a Eurocurrency Rate Loan.
"Unfunded Liabilities" means, with respect to any Plan or Multiemployer
Plan at any time, the amount, if any, by which (a) the present value of all
benefits under such Plan or Multiemployer Plan exceeds (b) the fair market value
of all Plan assets or Multiemployer Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan or such Multiemployer Plan, but only to
the extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"Unreimbursed Amount" has the meaning specified in Section 2.04(c)(i).
"Voting Percentage" means, as to any Lender, (a) at any time when the
Aggregate Commitments are in effect, such Lender's Pro Rata Share and (b) at any
time after the termination of the Aggregate Commitments, the percentage (carried
out to the ninth decimal place) which (i) the sum of (A) the Outstanding Amount
of such Lender's Committed Loans, plus (B) such Lender's Pro Rata Share of the
Outstanding Amount of Swing Line Loans, plus (C) such Lender's Pro Rata Share of
the Outstanding Amount of L/C Obligations, then comprises of (ii) the
Outstanding Amount of all Loans and L/C Obligations; provided, however, that if
any Lender has failed to fund any portion of the Committed Loans, participations
in L/C Obligations, or participations in Swing Line Loans required to be funded
by it hereunder, such Lender's Voting Percentage shall be deemed to be zero, and
the respective Pro Rata Shares and Voting Percentages of the other Lenders shall
be recomputed for purposes of this definition and the definition of "Required
Lenders" without regard to such Lender's Commitment or the
21
outstanding amount of its Committed Loans, L/C Advances and funded
participations in Swing Line Loans, as the case may be.
"Voting Stock" means, as to any Person, the capital stock of any class or
classes or other equity interests (however designated and including general
partnership interests in a partnership) having ordinary voting power for the
election of directors or similar governing body of such Person.
"Wholly-Owned Consolidated Subsidiary" means, with respect to any Person,
any Consolidated Subsidiary of such Person all of the shares of capital stock or
other ownership interests of which (except directors' qualifying shares) are at
the time directly or indirectly owned by such Person.
1.02 OTHER INTERPRETIVE PROVISIONS.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) (i) The words "herein," "hereto" and "hereunder" and words of
similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the
Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
(iv) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.
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(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
Avnet or the Required Lenders shall so request, the Administrative Agent, the
Lenders and Avnet shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) Avnet shall provide
to the Administrative Agent and the Lenders financial statements and other
documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained by Avnet
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
1.06 EXCHANGE RATES; CURRENCY EQUIVALENTS.
(a) The Administrative Agent shall determine the Spot Rates as of each
Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit
Extensions and Outstanding Amounts denominated in Alternative Currencies. Such
Spot Rates shall become effective as of such Revaluation Date and shall be the
Spot Rates employed in converting any amounts between the applicable currencies
until the next Revaluation Date to occur. Except for purposes of financial
statements delivered by Loan Parties hereunder or calculating financial
covenants hereunder or except as otherwise provided herein, the applicable
amount of any currency for purposes of the Loan Documents shall be such Dollar
Equivalent amount as so determined by the Administrative Agent.
(b) Wherever in this Agreement in connection with a Borrowing,
conversion, continuation or prepayment of a Loan, an amount, such as a required
minimum or multiple amount, is expressed in Dollars, but such Borrowing or Loan
is denominated in an Alternative Currency, such amount shall be the relevant
Alternative Currency Equivalent of such Dollar amount (rounded to the nearest
1,000 units of such Alternative Currency), as determined by the Administrative
Agent.
1.07 ADDITIONAL ALTERNATIVE CURRENCIES. The Borrowers may from time to
time request that Committed Loans be made in a currency other than those
specifically listed in the definition of "Alternative Currency;" provided that
such requested currency otherwise meets the
23
requirements set forth in such definition. Any such request shall be made to the
Administrative Agent (which shall promptly notify each Lender thereof) not later
than 11:00 a.m., San Francisco time, 15 Business Days prior to the date of the
desired Credit Extension. Each Lender shall notify the Administrative Agent, not
later than 11:00 a.m., San Francisco time, ten Business Days after receipt of
such request whether it consents, in its sole discretion, to making Committed
Loans in such requested currency. Any failure by a Lender to respond to such
request within the time period specified in the preceding sentence shall be
deemed to be a refusal by such Lender to make Committed Loans in such requested
currency. If all the Lenders consent to making Committed Loans in such requested
currency, the Administrative Agent shall so notify Avnet and such currency shall
thereupon be deemed for all purposes to be an Alternative Currency hereunder.
1.08 REDENOMINATION OF CERTAIN ALTERNATIVE CURRENCIES.
(a) Each obligation of the Borrowers to make a payment denominated in
the national currency unit of any member state of the European Union that adopts
the Euro as its lawful currency after the date hereof shall be redenominated
into Euro at the time of such adoption (in accordance with the EMU Legislation).
If, in relation to the currency of any such member state, the basis of accrual
of interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London interbank market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency; provided that if
any Borrowing in the currency of such member state is outstanding immediately
prior to such date, such replacement shall take effect, with respect to such
Borrowing, at the end of the then current Interest Period.
(b) Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 COMMITTED LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Committed
Loan") to the Borrowers in Dollars or in one or more Alternative Currencies from
time to time on any Business Day during the period from the Closing Date to the
Maturity Date, in an aggregate amount not to exceed at any time outstanding the
amount of such Lender's Commitment; provided, however, that after giving effect
to any Committed Borrowing, the Dollar Equivalent of (i) the aggregate
Outstanding Amount of all Loans and L/C Obligations shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Borrowers may borrow under this
24
Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.
Committed Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further
provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.
(a) Each Committed Borrowing, each conversion of Committed Loans from
one Type to the other, and each continuation of Committed Loans as the same Type
shall be made upon Avnet's irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 8:00 a.m., San Francisco time, (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans denominated in Dollars or of any
conversion of Eurocurrency Rate Loans to Base Rate Committed Loans, (ii) four
Business Days (or five Business Days, in the case of a Special Notice Currency)
prior to the requested date of any Borrowing of, or continuation of Eurocurrency
Rate Loans denominated in Alternative Currencies (provided that any such
Borrowing, conversion or continuation during the first 15 days after the Closing
Date may be undertaken upon three Business Days' prior notice), and (iii) on the
requested date of any Borrowing of Base Rate Committed Loans. Each such
telephonic notice must be confirmed promptly by delivery to the Administrative
Agent of a written Committed Loan Notice, appropriately completed and signed by
a Responsible Officer of Avnet on behalf of the applicable Borrower(s). Each
Committed Borrowing of, conversion to or continuation of Eurocurrency Rate Loans
denominated in Dollars shall be in a minimum principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof. Each Committed Borrowing of,
conversion to or continuation of Eurocurrency Rate Loans denominated in an
Alternative Currency shall be in a minimum Dollar Equivalent principal amount of
$5,000,000. Each Committed Borrowing of or conversion to Base Rate Committed
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Each Committed Loan Notice (whether telephonic or
written) shall specify (A) whether Avnet is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
Committed Loans as the same Type, (B) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(C) the identity of the respective Borrower(s) on whose behalf such Committed
Borrowing, conversion or continuation is being requested, (D) the principal
amount of Committed Loans to be borrowed, converted or continued, (E) the Type
of Committed Loans to be borrowed or to which existing Committed Loans are to be
converted, (F) if applicable, the duration of the Interest Period with respect
thereto, and (G) the currency of the Committed Loans to be borrowed; provided,
however, that if as of the date of any Committed Loan Notice requesting a
Committed Borrowing, there are Swing Line Loans or L/C Borrowings outstanding,
Avnet shall be deemed to have requested that a portion of the requested
Committed Loans in a principal amount equal to the outstanding principal amount
of such Swing Line Loans or L/C Borrowings be denominated in Dollars. If Avnet
fails to specify a currency in a Committed Loan Notice requesting a Borrowing,
then the Committed Loans so requested shall be made in Dollars. If Avnet fails
to specify a Type of Committed Loan in a Committed Loan Notice or if Avnet fails
to give a timely notice requesting a conversion or continuation, then the
applicable Committed Loans shall be made or continued as, or converted to, Base
Rate Loans; provided, however, that in the case of a failure to timely request a
continuation of Committed Loans denominated in an Alternative Currency, such
Loans shall be continued as Eurocurrency Rate Loans in their original currency
with an Interest Period of one month. Any automatic conversion to Base Rate
25
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurocurrency Rate Loans. If a Borrower
requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate
Loans in any such Committed Loan Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month. No
Committed Loan may be converted into or continued as a Committed Loan
denominated in a different currency, but instead must be prepaid in the original
currency of such Loan and reborrowed in the other currency.
(b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of its Pro Rata Share of the applicable
Committed Loans, and if no timely notice of a conversion or continuation is
provided by Avnet, the Administrative Agent shall notify each Lender of the
details of any automatic conversion to Base Rate Loans or continuation of
Committed Loans denominated in a currency other than Dollars, in each case as
described in the preceding subsection. In the case of a Committed Borrowing,
each Lender shall make the amount of its Committed Loan available to the
Administrative Agent in Same Day Funds at the Administrative Agent's Office for
the applicable currency not later than 11:00 a.m., San Francisco time, on the
Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrowers
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrowers on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to the Administrative Agent by Avnet; provided, however,
that if, on the date of the Committed Borrowing there are Swing Line Loans or
L/C Borrowings outstanding, then the proceeds of such Borrowing shall be
applied, first, to the payment in full of any such Swing Line Loans and L/C
Borrowings, and second, to the Borrowers as provided above.
(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of the Interest Period for such
Eurocurrency Rate Loan. During the existence of a Default or Event of Default,
no Loans may be requested as, converted to or continued as Eurocurrency Rate
Loans without the consent of the Required Lenders, and in the absence of such
consent, the Required Lenders may demand and Avnet shall be deemed to have
requested, (i) that any or all of the then outstanding Eurocurrency Rate Loans
denominated in Dollars be converted immediately to Base Rate Committed Loans and
(ii) that any or all of the then outstanding Eurocurrency Rate Loans denominated
in an Alternative Currency be prepaid on the last day of the then current
Interest Period with respect thereto.
(d) The Administrative Agent shall promptly notify Avnet and the Lenders
of the interest rate applicable to any Eurocurrency Rate Loan upon determination
of such interest rate. The determination of the Eurocurrency Rate by the
Administrative Agent shall be conclusive in the absence of manifest error. The
Administrative Agent shall notify Avnet and the Lenders of any change in Bank of
America's prime rate used in determining the Base Rate promptly following the
public announcement of such change.
(e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than ten Interest Periods in
effect with respect to Committed Loans;
26
provided that, unless otherwise consented to by the Administrative Agent, all
Interest Periods commencing prior to the 31st day after the Closing Date shall
end on the same Business Day.
2.03 SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans in Dollars (each such loan, a
"Swing Line Loan") to Avnet from time to time on any Business Day during the
period from the Closing Date to the Maturity Date in an aggregate amount not to
exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Dollar Equivalent of the Outstanding Amount of Committed Loans of the Swing Line
Lender in its capacity as a Lender of Committed Loans, may exceed the amount of
such Lender's Commitment; provided, however, that after giving effect to any
Swing Line Loan, the Dollar Equivalent of (i) the aggregate Outstanding Amount
of all Loans and L/C Obligations shall not exceed the Aggregate Commitments, and
(ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus
such Lender's Pro Rata Share of L/C Obligations and the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Commitment. Within the
foregoing limits, and subject to the other terms and conditions hereof, Avnet
may borrow under this Section 2.03, prepay under Section 2.05, and reborrow
under this Section 2.03; provided, however, that the Swing Line Lender may
terminate or suspend the Swing Line at any time in its sole discretion upon five
Business Days' notice to Avnet. Each Swing Line Loan shall be a Base Rate Loan.
Each Swing Line Loan made hereunder shall be payable upon demand therefor by the
Swing Line Lender. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender's Pro Rata Share times the
amount of such Swing Line Loan.
(b) Borrowing Procedures. Unless the Swing Line Lender has notified
Avnet that the Swing Line has been terminated or suspended as provided in
Section 2.03(a), each Swing Line Borrowing shall be made upon Avnet's
irrevocable notice to the Swing Line Lender and the Administrative Agent, which
may be given by telephone. Each such notice must be received by the Swing Line
Lender and the Administrative Agent not later than 1:00 p.m., San Francisco
time, on the requested borrowing date, and shall specify (i) the amount to be
borrowed, which shall be a minimum of $1,000,000 or a whole multiple of $100,000
in excess thereof, and (ii) the requested borrowing date, which shall be a
Business Day. Each such telephonic notice must be confirmed promptly by delivery
to the Swing Line Lender and the Administrative Agent of a written Swing Line
Loan Notice, appropriately completed and signed by a Responsible Officer of
Avnet. Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the Administrative Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Administrative Agent (including at the request of any Lender)
prior to 2:00 p.m., San Francisco time, on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan
as a result of the limitations set forth in the proviso to the first sentence of
Section 2.03(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions
27
hereof, the Swing Line Lender will, not later than 3:00 p.m., San Francisco
time, on the borrowing date specified in such Swing Line Loan Notice, make the
amount of its Swing Line Loan available to Avnet at its office by crediting the
account of Avnet on the books of the Swing Line Lender in immediately available
funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of Avnet (which hereby irrevocably
requests the Swing Line Lender to so request on each of its behalf), that
each Lender make a Committed Base Rate Loan in an amount equal to such
Lender's Pro Rata Share of the amount of Swing Line Loans then
outstanding. Such request shall be made in accordance with the
requirements of Section 2.02, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject
to the unutilized portion of the Aggregate Commitments and the conditions
set forth in Section 4.02. The Swing Line Lender shall furnish Avnet with
a copy of the applicable Committed Loan Notice promptly after delivering
such notice to the Administrative Agent. Each Lender shall make an amount
equal to its Pro Rata Share of the amount specified in such Committed Loan
Notice available to the Administrative Agent in immediately available
funds for the account of the Swing Line Lender at the Administrative
Agent's Office not later than 11:00 a.m., San Francisco time, on the day
specified in such Committed Loan Notice, whereupon, subject to Section
2.03(c)(ii), each Lender that so makes funds available shall be deemed to
have made a Base Rate Committed Loan to Avnet in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line
Lender.
(ii) If for any reason any Committed Borrowing cannot be requested
in accordance with Section 2.03(c)(i) or any Swing Line Loan cannot be
refinanced by such a Committed Borrowing, the Committed Loan Notice
submitted by the Swing Line Lender shall be deemed to be a request by the
Swing Line Lender that each of the Lenders fund its risk participation in
the relevant Swing Line Loan and each Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.03(c)(i) shall be deemed payment in respect of such
participation.
(iii) If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section
2.03(c) by the time specified in Section 2.03(c)(i), the Swing Line Lender
shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for
the period from the date such payment is required to the date on which
such payment is immediately available to the Swing Line Lender at a rate
per annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or to
purchase and fund participations in Swing Line Loans pursuant to this
Section 2.03(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any set-
28
off, counterclaim, recoupment, defense or other right which such Lender
may have against the Swing Line Lender, any Borrower or any other Person
for any reason whatsoever, (B) the occurrence or continuance of a Default
or Event of Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that
each Lender's obligation to make Committed Loans pursuant to this Section
2.03(c) is subject to the conditions set forth in Section 4.02. Any such
purchase of participations shall not relieve or otherwise impair the
obligation of Avnet to repay Swing Line Loans, together with interest as
provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Pro Rata Share of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participation was outstanding
and funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by
the Swing Line Lender, each Lender shall pay to the Swing Line Lender its
Pro Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate. The
Administrative Agent will make such demand upon the request of the Swing
Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing Avnet for interest on the Swing Line Loans.
Until each Lender funds its Committed Base Rate Loan or participation pursuant
to this Section 2.03 to refinance such Lender's Pro Rata Share of any Swing Line
Loan, interest in respect of such Pro Rata Share shall be solely for the account
of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. Avnet shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
2.04 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 2.04, (1) from time to time on any Business Day
during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of Avnet, and
to amend or renew Letters of Credit previously issued by it, in accordance
with subsection (b) below, and (2) to honor drafts under the Letters of
Credit; and (B) the Lenders severally agree to participate in Letters of
Credit issued for the account of Avnet; provided that the L/C Issuer shall
not be obligated to make any L/C Credit Extension with respect to any
Letter of Credit, and no Lender shall be obligated to participate in,
29
any Letter of Credit if as of the date of such L/C Credit Extension, (x)
the Outstanding Amount of all L/C Obligations and all Loans would exceed
the Aggregate Commitments, (y) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata
Share of the Outstanding Amount of all Swing Line Loans would exceed such
Lender's Commitment, or (z) the Outstanding Amount of the L/C Obligations
would exceed the Letter of Credit Sublimit. Within the foregoing limits,
and subject to the terms and conditions hereof, Avnet's ability to obtain
Letters of Credit shall be fully revolving, and accordingly Avnet may,
during the foregoing period, obtain Letters of Credit to replace Letters
of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any
Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall
impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the L/C Issuer any unreimbursed
loss, cost or expense which was not applicable on the Closing Date
and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) subject to Section 2.04(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve
months after the date of issuance or last renewal, unless the
Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one
or more policies of the L/C Issuer; or
(E) such Letter of Credit is denominated in a currency other
than Dollars, or is in a face amount less than $500,000.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Evergreen Letters of Credit.
30
(i) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of Avnet delivered to the L/C Issuer (with a copy
to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer
of Avnet. Such L/C Application must be received by the L/C Issuer and the
Administrative Agent not later than 8:00 a.m., San Francisco time, at
least two Business Days (or such later date and time as the L/C Issuer may
agree in a particular instance in its sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the
case of a request for an initial issuance of a Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory
to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate to be presented
by such beneficiary in case of any drawing thereunder; and (G) such other
matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may
require.
(ii) Promptly after receipt of any Letter of Credit Application,
the L/C Issuer will confirm with the Administrative Agent (by telephone or
in writing) that the Administrative Agent has received a copy of such
Letter of Credit Application from Avnet and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that the
requested issuance or amendment is permitted in accordance with the terms
hereof, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of
Avnet or enter into the applicable amendment, as the case may be, in each
case in accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a participation in such Letter of
Credit in an amount equal to the product of such Lender's Pro Rata Share
times the amount of such Letter of Credit.
(iii) If Avnet so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in it sole and absolute discretion, agree
to issue a Letter of Credit that has automatic renewal provisions (each,
an "Evergreen Letter of Credit"); provided that any such Evergreen Letter
of Credit must permit the L/C Issuer to prevent any such renewal at least
once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof
not later than a day (the "Nonrenewal Notice Date") in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by the L/C Issuer, Avnet shall not be
required to make a specific request to the L/C Issuer for any such
renewal. Once an Evergreen Letter of Credit has been issued, the Lenders
shall be deemed to have authorized (but may not require) the L/C Issuer to
permit the renewal of such Letter of Credit at any time to a date not
later than the Letter of Credit Expiration
31
Date; provided, however, that the L/C Issuer shall not permit any such
renewal if (A) the L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its renewed form under the terms hereof, or
(B) it has received notice (which may be by telephone or in writing) on or
before the Business Day immediately preceding the Nonrenewal Notice Date
(1) from the Administrative Agent that the Required Lenders have elected
not to permit such renewal or (2) from the Administrative Agent, any
Lender or Avnet that one or more of the applicable conditions specified in
Section 4.02 is not then satisfied. Notwithstanding anything to the
contrary contained herein, the L/C Issuer shall have no obligation to
permit the renewal of any Evergreen Letter of Credit at any time.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, the L/C Issuer will also deliver to Avnet
and the Administrative Agent a true and complete copy of such Letter of
Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon any drawing under any Letter of Credit, the L/C Issuer
shall notify Avnet and the Administrative Agent thereof. Not later than
10:00 a.m., San Francisco time, on the date of any payment by the L/C
Issuer under a Letter of Credit (each such date, an "Honor Date"), Avnet
shall reimburse the L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing. If Avnet fails to so reimburse
the L/C Issuer by such time, the Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed
drawing (the "Unreimbursed Amount"), and such Lender's Pro Rata Share
thereof. In such event, Avnet shall be deemed to have requested a
Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the principal amount
of Base Rate Loans, but subject to the amount of the unutilized portion of
the Aggregate Commitments and the conditions set forth in Section 4.02
(other than the delivery of a Committed Loan Notice). Any notice given by
the L/C Issuer or the Administrative Agent pursuant to this Section
2.04(c)(i) may be given by telephone if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall not affect
the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 2.04(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro Rata Share of
the Unreimbursed Amount not later than 10:00 a.m., San Francisco time, on
the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.04(c)(iii), each Lender
that so makes funds available shall be deemed to have made a Committed
Base Rate Loan to Avnet in such amount. The Administrative Agent shall
remit the funds so received to the L/C Issuer.
32
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, Avnet shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.04.
(iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.04(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such
Lender's Pro Rata Share of such amount shall be solely for the account of
the L/C Issuer.
(v) Each Lender's obligation to make Committed Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this Section 2.04(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A)
any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the L/C Issuer, Avnet or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default or Event
of Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing. Any such reimbursement shall not
relieve or otherwise impair the obligation of Avnet to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative
Agent for the account of the L/C Issuer any amount required to be paid by
such Lender pursuant to the foregoing provisions of this Section 2.04(c)
by the time specified in Section 2.04(c)(ii), the L/C Issuer shall be
entitled to recover from such Lender (acting through the Administrative
Agent), on demand, such amount with interest thereon for the period from
the date such payment is required to the date on which such payment is
immediately available to the L/C Issuer at a rate per annum equal to the
Federal Funds Rate from time to time in effect. A certificate of the L/C
Issuer submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with Section 2.04(c), if
the Administrative Agent receives for the account of the L/C Issuer any
payment related to such Letter of Credit (whether directly from Avnet or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), or any payment of interest thereon, the
Administrative Agent will
33
distribute to such Lender its Pro Rata Share thereof in the same funds as
those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.04(c)(i) is required to be
returned, each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand
to the date such amount is returned by such Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of Avnet to reimburse the L/C
Issuer for each drawing under each Letter of Credit, and to repay each L/C
Borrowing and each drawing under a Letter of Credit that is refinanced by a
Borrowing of Committed Loans, shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or
other right that Avnet may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly or
substantially comply with the terms of such Letter of Credit; or any
payment made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under any
Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of,
Avnet.
Avnet shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with Avnet's instructions or other irregularity, Avnet will
immediately notify the L/C Issuer. Avnet shall be
34
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and Avnet agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Agent-Related Person
nor any of the respective correspondents, participants or assignees of the L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. Avnet hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with respect
to its use of any Letter of Credit; provided, however, that this assumption is
not intended to, and shall not, preclude Avnet's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. No Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.04(e); provided, however, that anything in such clauses to the
contrary notwithstanding, Avnet may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to Avnet, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by Avnet
which Avnet proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, Avnet shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount).
(h) Applicability of ISP9. Unless otherwise expressly agreed by the L/C
Issuer and Avnet when a Letter of Credit is issued the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and
(i) Letter of Credit Fees. Avnet shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share a Letter of
Credit fee for each
35
Letter of Credit equal to the Applicable Rate times the actual daily maximum
amount available to be drawn under each Letter of Credit. Such fee for each
Letter of Credit shall be due and payable on the last Business Day of each
March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, and on the Letter of Credit
Expiration Date. If there is any change in the Applicable Rate during any
quarter, the actual daily amount of each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. Avnet shall pay directly to the L/C Issuer for its own account a
fronting fee in an amount equal to 1/8 of 1% on the daily maximum amount
available to be drawn thereunder, due and payable quarterly in arrears on the
next Business Day immediately following the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the issuance of such Letter of Credit, and on the Letter of Credit Expiration
Date. In addition, Avnet shall pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such fees and charges are due
and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.05 PREPAYMENTS.
(a) The Borrowers may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay Committed Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
the Administrative Agent not later than 8:00 a.m., San Francisco time, (A) three
Business Days prior to any date of prepayment of Eurocurrency Rate Loans
denominated in Dollars and four Business Days (or five, in the case of Special
Notice Currencies) prior to any date of prepayment of Eurocurrency Rate Loans
denominated in Alternative Currencies, and (B) on the date of prepayment of Base
Rate Committed Loans; (ii) any prepayment of Eurocurrency Rate Loans denominated
in Dollars shall be in a minimum principal amount of or approximating $5,000,000
or a whole multiple of or approximating $1,000,000 in excess thereof; (iii) any
prepayment of Eurocurrency Rate Loans denominated in an Alternative Currency
shall be in a minimum Dollar Equivalent principal amount of or approximating
$5,000,000; and (iv) any prepayment of Base Rate Committed Loans shall be in a
principal amount of or approximating $5,000,000 or a whole multiple of or
approximating $1,000,000 in excess thereof. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Committed Loans to be
prepaid. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of such Lender's Pro Rata Share of such
prepayment. If such notice is given by Avnet, the applicable Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurocurrency Rate
Loan shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Committed Loans of the Lenders in accordance with their
respective Pro Rata Shares.
36
(b) Avnet may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 9:00 a.m., San Francisco time, on the date of the
prepayment, and (ii) any such prepayment shall be in a minimum principal amount
of $1,000,000. Each such notice shall specify the date and amount of such
prepayment. If such notice is given by Avnet, Avnet shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein.
(c) If the Administrative Agent notifies Avnet at any time that the
Dollar Equivalent of the Outstanding Amount of all Loans and L/C Obligations at
such time exceeds an amount equal to 102% of the Aggregate Commitments then in
effect, the Borrowers shall, within two Business Days after receipt of such
notice, prepay Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount sufficient to reduce the Dollar Equivalent of such Outstanding
Amount as at such time to an amount not to exceed 100% of the Aggregate
Commitments then in effect; provided, however, that the Borrowers shall have no
obligation to prepay such Loans pursuant to this subsection (c) if the
Administrative Agent subsequently notifies Avnet within such two Business Day
period that the Dollar Equivalent of such Outstanding Amount no longer exceeds
100% of the Aggregate Commitments then in effect.
2.06 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrowers, collectively
and not individually, may, upon notice by Avnet to the Administrative Agent,
terminate the Aggregate Commitments, or permanently reduce the Aggregate
Commitments to an amount not less than the then Outstanding Amount of all Loans
and L/C Obligations; provided that (i) any such notice shall be received by the
Administrative Agent not later than 8:00 a.m., San Francisco time, five Business
Days prior to the date of termination or reduction, and (ii) any such partial
reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of
$1,000,000 in excess thereof. The Administrative Agent will promptly notify the
Lenders of any such notice of reduction or termination of the Aggregate
Commitments. Once reduced in accordance with this Section, the Aggregate
Commitments may not be increased, whether pursuant to Section 2.14 or otherwise.
Any reduction of the Aggregate Commitments shall be applied to the Commitment of
each Lender according to its Pro Rata Share. All facility fees accrued until the
effective date of any termination of the Aggregate Commitments shall be paid on
the effective date of such termination.
2.07 REPAYMENT OF LOANS.
(a) The Borrowers shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Committed Loans outstanding on such date.
(b) Avnet shall repay each Swing Line Loan on the earlier to occur of
(i) the date seven Business Days after such Loan is made and (ii) the Maturity
Date.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurocurrency Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a
37
rate per annum equal to the Eurocurrency Rate for such Interest Period plus the
Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.
(b) While any Event of Default exists or after acceleration, the
Borrowers shall pay interest on the principal amount of all outstanding
Obligations at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Law. Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 FEES.
(a) Facility Fee. Avnet shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share, a facility fee
equal to the Applicable Rate times the actual daily amount of the Aggregate
Commitments, regardless of usage. The facility fee shall accrue at all times
from the Closing Date until the Maturity Date and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date. The facility fee shall be calculated quarterly in
arrears, and if there is any change in the Applicable Rate during any quarter,
the actual daily amount shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect. The facility fee shall accrue at all times, including at any time during
which one or more of the conditions in Article IV is not met.
(b) Utilization Fee. Avnet shall pay to the Administrative Agent for the
account of each Lender in accordance with each such Lender's Pro Rata Share, a
utilization fee of:
(i) 0.125% times the Dollar Equivalent of the actual daily
aggregate Outstanding Amount of Loans and L/C Obligations on each day that
the sum of (A) the Dollar Equivalent of the aggregate Outstanding Amount
of Loans and L/C Obligations on such day plus (B) if such agreement is
then in effect, the "Dollar Equivalent" of the aggregate "Outstanding
Amount" of "Loans" under and as defined in the 364-Day Credit Agreement on
such day, is equal to or greater than 25%, but is less than 50%, of the
sum of (x) the Aggregate Commitments in effect on such day plus (y) if
such agreement is then in effect, the "Aggregate Commitments" in effect
under and as defined in the 364-Day Credit Agreement on such day; and
38
(ii) 0.250% times the Dollar Equivalent of the actual daily
aggregate Outstanding Amount of Loans and L/C Obligations on each day that
the sum of (A) the Dollar Equivalent of the aggregate Outstanding Amount
of Loans and L/C Obligations on such day plus (B) if such agreement is
then in effect, the "Dollar Equivalent" of the aggregate "Outstanding
Amount" of "Loans" under and as defined in the 364-Day Credit Agreement on
such day, is equal to or greater than 50% of the sum of (x) the Aggregate
Commitments in effect on such day plus (y) if such agreement is then in
effect, the "Aggregate Commitments" in effect under and as defined in the
364-Day Credit Agreement on such day.
The utilization fee shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date. The
utilization fee shall be calculated quarterly in arrears and shall accrue at all
times from the Closing Date to the Maturity Date, including at any time during
which one or more of the conditions in Article IV is not met.
(c) Leverage Fee.
(i) Avnet shall pay to the Administrative Agent for the account of
each Lender in accordance with each such Lender's Pro Rata Share, a
leverage fee on a quarterly basis of 0.250% times the Dollar Equivalent of
the actual daily aggregate Outstanding Amount of Loans and L/C Obligations
on each day during any such Fiscal Quarter (the "Leverage Fee Reference
Quarter") that the ratio of (A) Adjusted Funded Debt for such day to (B)
EBITDA (as calculated for the four consecutive Fiscal Quarter period ended
on the last day of such Leverage Fee Reference Quarter and as set forth in
the Compliance Certificate delivered by Avnet to the Administrative Agent
in respect of such Leverage Fee Reference Quarter) equals or exceeds 4.00
to 1.00.
(ii) For purposes of this subsection (c), "Adjusted Funded Debt" of
Avnet existing on any day in any Leverage Fee Reference Quarter shall be
an amount equal to the sum of:
(A) the amount of Funded Debt existing as of the last day of
the Leverage Fee Reference Quarter, other than (I) Obligations
existing on such day, (II), if such agreement is then in effect,
"Obligations" as defined in and incurred under the 364-Day Credit
Agreement as of such day, and (III), if such agreement is then in
effect, "Obligations" as defined in and incurred under the Term Loan
Credit Agreement as of such day; plus
(B) Attributable Indebtedness of any Securitization
Subsidiary outstanding as of the last day of the applicable Leverage
Fee Reference Quarter; plus
(C) an amount equal to the sum of (I) the Outstanding Amount
of Loans and L/C Obligations on such day, plus, (II) if such
agreement is then in effect, the "Outstanding Amount" of "Loans"
under and as defined in the 364-Day Credit Agreement on such day,
plus, (III) if such agreement is then in effect,
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the "Outstanding Amount" of "Loans" under and as defined in the Term
Loan Agreement on such day.
(iii) The leverage fee shall be due and payable in arrears (A) three
Business Days after each date on which Avnet has delivered or is required
to deliver to the Administrative Agent a Compliance Certificate pursuant
to Section 6.01(c) commencing with the certificate required to be
delivered in respect of the Fiscal Quarter ended on or about September 30,
2001, and (B) on the Maturity Date; provided that, for purposes of
calculating the Adjusted Funded Debt of Avnet in respect of the period
ending on the Maturity Date and commencing on the first day of the Fiscal
Quarter immediately following the most recent Fiscal Quarter for which
Avnet has delivered financial statements pursuant to Section 6.01(a) or
(b) (such period, the "Final Leverage Fee Period"), the amounts described
in clauses (ii)(A) and (ii)(B) above with respect to the Final Leverage
Fee Period shall be deemed to be identical to those amounts disclosed by
Avnet in its then-most recently-delivered Compliance Certificate. The
leverage fee shall be calculated in arrears and shall accrue at all times
from the Closing Date to the Maturity Date, including at any time during
which one or more of the conditions in Article IV is not met.
(d) Arrangement and Agency Fees. Avnet shall pay an arrangement fee to
the Arranger for the Arranger's own account, and shall pay an agency fee to the
Administrative Agent for the Administrative Agent's own account, in the amounts
and at the times specified in the letter agreement, dated September 13, 2001
(the "Agent/Arranger Fee Letter"), between Avnet, the Arranger and the
Administrative Agent. Such fees shall be fully earned when paid and shall be
nonrefundable for any reason whatsoever.
(e) Lenders' Upfront Fee. On the Closing Date, Avnet shall pay to the
Administrative Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, an upfront fee in an amount set forth in the
Agency/Arranger Fee Letter. Such upfront fees are for the credit facilities
committed by the Lenders under this Agreement and are fully earned on the date
paid. The upfront fee paid to each Lender is solely for its own account and is
nonrefundable for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. Interest on Base Rate Loans shall
be calculated on the basis of a year of 365 or 366 days, as the case may be, and
the actual number of days elapsed. Computation of all other types of interest
and all fees shall be calculated on the basis of a year of 360 days and the
actual number of days elapsed, which results in a higher yield to the payee
thereof than a method based on a year of 365 or 366 days, or, in the case of
interest in respect of Loans denominated in Alternative Currencies as to which
market practice differs from the foregoing, in accordance with such market
practice. Interest shall accrue on each Loan for the day on which the Loan is
made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall bear interest for one day.
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2.11 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the
Borrowers and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrowers hereunder to pay any amount owing with respect to the Loans or
L/C Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, such Lender's Loans may be
evidenced by a Committed Loan Note and/or a Swing Line Note, as applicable, in
addition to such accounts or records. Each Lender may attach schedules to its
Note(s) and endorse thereon the date, Type (if applicable), amount and maturity
of the applicable Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit and Swing Line Loans. In the
event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall
control.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein and except with respect to
principal of and interest on Loans denominated in an Alternative Currency, all
payments by the Borrowers hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
applicable Administrative Agent's Office in Dollars and in Same Day Funds not
later than 11:00 a.m., San Francisco time, on the date specified herein. Except
as otherwise expressly provided herein, all payments by the Borrowers hereunder
with respect to principal and interest on Loans denominated in an Alternative
Currency shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the applicable
Administrative Agent's Office in such Alternative Currency and in Same Day Funds
not later than such time on the dates specified herein as may be determined by
the Administrative Agent to be necessary for such payment to be credited on such
date in accordance with normal banking procedures in the place of payment. The
Administrative Agent will promptly distribute to each Lender its Pro Rata Share
(or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender's Lending Office. All payments received
by the Administrative Agent (i) after 11:00 a.m., San Francisco time, in the
case of payments in Dollars, or (ii) later than the time specified by the
Administrative Agent as provided in the third sentence of this paragraph in the
case of payments in an Alternative Currency, shall in each case be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.
41
(b) Subject to the definition of "Interest Period," if any payment to be
made by the Borrowers shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.
(c) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward costs and expenses (including Attorney Costs and amounts payable under
Article III) incurred by the Administrative Agent and each Lender, (ii) second,
toward repayment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (iii) third, toward repayment of principal and L/C
Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such
parties.
(d) Unless Avnet or any Lender has notified the Administrative Agent
prior to the date any payment is required to be made by it to the Administrative
Agent hereunder, that a Borrower or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Borrowers or
such Lender, as the case may be, have timely made such payment and may (but
shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in Same Day Funds,
then:
(i) if such Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion of
such assumed payment that was made available to such Lender in Same Day
Funds, together with interest thereon in respect of each day from and
including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in Same Day Funds, at the applicable Overnight Rate
from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
Same Day Funds, together with interest thereon for the period from the
date such amount was made available by the Administrative Agent to the
applicable Borrower to the date such amount is recovered by the
Administrative Agent (the "Compensation Period") at a rate per annum equal
to the applicable Overnight Rate from time to time in effect. If such
Lender pays such amount to the Administrative Agent, then such amount
shall constitute such Lender's Committed Loan included in the applicable
Borrowing. If such Lender does not pay such amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent may make
a demand therefor upon Avnet, and Avnet shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to the
applicable Borrowing. Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Commitment or to prejudice any rights
which the Administrative Agent or any Borrower may have against any Lender
as a result of any default by such Lender hereunder.
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A notice of the Administrative Agent to any Lender with respect to any
amount owing under this subsection (d) shall be conclusive, absent manifest
error.
(e) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and the conditions to the applicable Credit Extension set forth
in Article IV are not satisfied or waived in accordance with the terms hereof,
the Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.
(f) The obligations of the Lenders hereunder to make Committed Loans and
to fund participations in Letters of Credit and Swing Line Loans are several and
not joint. The failure of any Lender to make any Committed Loan or to fund any
such participation on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its
Committed Loan or purchase its participation.
(g) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Committed Loans made by it, or
the participations in Letters of Credit or in Swing Line Loans held by it (but
not including any amounts applied by the Swing Line Lender to outstanding Swing
Line Loans), any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its ratable share (or other
share contemplated hereunder) thereof, such Lender shall immediately (a) notify
the Administrative Agent of such fact, and (b) purchase from the other Lenders
such participations in the Committed Loans made by them and/or such
subparticipations in the participations in L/C Obligations or Swing Line Loans
held by them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment in respect of such Committed Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrowers
agree that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrowers in the amount of such
participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following
any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with
43
respect to the portion of the Obligations purchased to the same extent as though
the purchasing Lender were the original owner of the Obligations purchased.
2.14 INCREASE IN COMMITMENTS.
(a) Provided there exists no Default or Event of Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders) and consent
of the Administrative Agent, Avnet may, from time to time, request an increase
in the Aggregate Commitments in accordance with the terms of this Section 2.14.
At the time of sending such notice, Avnet (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than 15 Business Days from
the date of delivery of such notice to the Lenders). Each Lender shall notify
the Administrative Agent within such time period whether or not it agrees in its
sole discretion to increase its Commitment and, if so, whether by an amount
equal to, greater than, or less than its Pro Rata Share of such requested
increase. Any Lender not responding in writing to the Administrative Agent
within such time period shall be deemed to have declined to increase its
Commitment. The Administrative Agent shall notify Avnet and each Lender of the
Lenders' responses to each request made hereunder. To achieve the full amount of
a requested increase, Avnet may also invite additional Eligible Assignees
satisfactory to the Administrative Agent to become Lenders pursuant to a Joinder
Agreement in substantially the form set forth in Exhibit J.
(b) If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and Avnet shall determine the effective date
(the "Increase Effective Date") and the final allocation of such increase;
provided that if such final allocation is not to be ratable among the Lenders
(based on the Lenders' respective Pro Rata Shares in effect at the time of such
notice), then the Increase Effective Date may not occur earlier than the last
day of the latest-ending Interest Period then in effect with respect to
Committed Loans. The Administrative Agent shall promptly notify Avnet and the
Lenders of the final allocation of such increase and the Increase Effective
Date. If the final allocation of such increases is not to be ratable among the
Lenders (based on the Lenders' respective Pro Rata Shares in effect at the time
of such notice), then during the period between the date of such notice and the
Increase Effective Date, no Eurocurrency Rate Loan shall be permitted to have an
Interest Period that ends later than the Increase Effective Date (whether by
means of a Committed Borrowing or a continuation of such a Loan for a new
Interest Period). As a condition precedent to such increase, Avnet shall deliver
to the Administrative Agent a certificate dated as of the Increase Effective
Date (in sufficient copies for distribution to each Lender) signed by a
Responsible Officer of Avnet (i) certifying and attaching the resolutions
adopted by the Borrowers approving or consenting to such increase, (ii) in the
case of Avnet, including a Compliance Certificate demonstrating pro forma
compliance with Section 6.11 after giving effect to such increase, and (iii)
certifying that, before and after giving effect to such increase, the
representations and warranties contained in Article V are true and correct on
and as of the Increase Effective Date and that no Default or Event of Default
exists. The Borrowers shall deliver new or amended Notes reflecting the
increased Commitment of any Lender holding or requesting a Note. The
Administrative Agent shall distribute an amended Schedule 2.01 (which shall be
deemed incorporated into this Agreement), to reflect any changes therein
resulting from such increase. The Borrowers shall prepay any Loans outstanding
on the Increase Effective Date (and pay any additional amounts required pursuant
to Section 3.05) to the extent necessary to keep the outstanding Loans ratable
with any
44
revised Pro Rata Shares arising from any nonratable increase in the Commitments
under this Section.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrowers to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which the
Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to the Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), the Administrative Agent and such Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) Avnet
shall make such deductions, (iii) Avnet shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, Avnet shall
furnish to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrowers agree to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If any Borrower shall be required to deduct or pay any taxes or
other taxes from or in respect of any sum payable under any loan document to the
Administrative Agent or any Lender, Avnet shall also pay to the Administrative
Agent (for the account of such Lender) or to such Lender, at the time interest
is paid, such additional amount that such Lender specifies is necessary to
preserve the after-tax yield (after factoring in all taxes, including taxes
imposed on or measured by net income) such Lender would have received if such
taxes or other taxes had not been imposed.
(d) The Borrowers agree to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability
45
(including penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall be made within 30 days after the date the Lender
or the Administrative Agent makes a demand therefor.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurocurrency Rate Loans (whether denominated in Dollars or an Alternative
Currency (the "Applicable Currency")), or to determine or charge interest rates
based upon the Eurocurrency Rate, then, on notice thereof by such Lender to
Avnet through the Administrative Agent, any obligation of such Lender to make or
continue Eurocurrency Rate Loans in the Applicable Currency or, if the
Applicable Currency is Dollars, to convert Base Rate Committed Loans to
Eurocurrency Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and Avnet that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrowers shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable and such Loans are denominated in Dollars, convert all such
Eurocurrency Rate Loans of such Lender to Base Rate Loans, either on the last
day of the Interest Period thereof, if such Lender may lawfully continue to
maintain such Eurocurrency Rate Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such Eurocurrency Rate Loans. Upon
any such prepayment or conversion, the applicable Borrower shall also pay
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. (a) If the Administrative Agent
determines in connection with any request for a Eurocurrency Rate Loan or a
conversion to or continuation thereof that (i) deposits in the relevant currency
are not being offered to banks in the applicable offshore interbank market for
such currency for the applicable amount and Interest Period of such Eurocurrency
Rate Loan, (ii) adequate and reasonable means do not exist for determining the
Eurocurrency Base Rate for such Eurocurrency Rate Loan, or (iii) the
Eurocurrency Base Rate for such Eurocurrency Rate Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Eurocurrency Rate Loan,
the Administrative Agent will promptly notify Avnet and all Lenders. Thereafter,
the obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall
be suspended until the Administrative Agent revokes such notice. Upon receipt of
such notice, the Borrowers may revoke any pending request for a Borrowing,
conversion or continuation of Eurocurrency Rate Loans or, failing that, will be
deemed to have converted such request into a request for a Committed Borrowing
of Base Rate Loans in the amount specified therein.
(b) If any Mandatory Cost Reference Lender's Commitment shall terminate
(otherwise than on termination of the Aggregate Commitments), or for any reason
whatsoever any Mandatory Cost Reference Lender shall cease to be a Lender
hereunder, such Mandatory Cost Reference Lender shall thereupon cease to be a
Mandatory Cost Reference Lender, and, when necessary, the Mandatory Cost Rate
shall be determined on the basis of the rates as notified by the remaining
Mandatory Cost Reference Lenders in accordance with Schedule 1.01(m).
46
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurocurrency Rate Loans or (as the case
may be) issuing or participating in Letters of Credit, or a reduction in the
amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements utilized, as to Eurocurrency Rate Loans, in the determination of
the Eurocurrency Rate), then from time to time upon demand of such Lender (with
a copy of such demand to the Administrative Agent), the applicable Borrower
shall pay to such Lender such additional amounts as will compensate such Lender
for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
applicable Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such reduction.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the applicable Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any assignment of Loans undertaken by any Lender pursuant to any
increase in Commitments requested by Avnet pursuant to Section 2.14; or
(c) any failure by the Borrowers (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by Avnet;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrowers to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurocurrency Rate Loan made
47
by it at the Eurocurrency Base Rate used in determining the Eurocurrency Rate
for such Loan by a matching deposit or other borrowing in the applicable
offshore interbank market for such currency for a comparable amount and for a
comparable period, whether or not such Eurocurrency Rate Loan was in fact so
funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
(b) Upon any Lender's making a claim for compensation under Section 3.01
or 3.04, Avnet may remove or replace such Lender in accordance with Section
9.18.
3.07 SURVIVAL. All of the Borrowers' obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) Unless waived by all the Lenders (or by the Administrative Agent
with respect to immaterial matters or items specified in clause (v) below or
opinions in respect of Designated Borrowers under clause (vii) below, with
respect to which Avnet has given assurances satisfactory to the Administrative
Agent that such items shall be delivered promptly and in no event later than 15
days (or with respect to any Arizona tax good standing certificate required to
be delivered pursuant to clause (v) below, 45 days) following the Closing Date,
the Administrative Agent's receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent, the Lenders and their
respective legal counsel:
(i) executed counterparts of this Agreement, sufficient in number
for distribution to the Administrative Agent, each Lender and Avnet;
(ii) Committed Loan Notes executed by each Borrower in favor of
each Lender requesting such a Note, each in a principal amount equal to
such Lender's Commitment;
(iii) a Swing Line Note executed by Avnet in favor of the Swing Line
Lender in the principal amount of the Swing Line Sublimit;
48
(iv) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of the secretary or assistant
secretary of each Loan Party as the Administrative Agent may require to
establish the identities of and verify the authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such
Loan Party is a party;
(v) such evidence as the Administrative Agent may reasonably
require to verify that each Loan Party is duly organized or formed,
validly existing, in good standing and qualified to engage in business in
(A) its jurisdiction of organization, (B) the jurisdiction of the location
of its chief executive offices and (C) each jurisdiction in which the
failure to so qualify could reasonably be expected to have a material
adverse effect on the business, financial position or results of
operations of such Loan Party, including certified copies of each Loan
Party's Organization Documents, certificates of good standing and/or
qualification to engage in business and (to the extent generally
available) tax good standing certificates;
(vi) a certificate signed by a Responsible Officer of Avnet
certifying (A) that the conditions specified in Sections 4.02(a) and (b)
have been satisfied, (B) that there has been no event or circumstance
since the date of the Audited Financial Statements which has or could be
reasonably expected to have a material adverse change in or to the
property, assets, business, condition (financial or otherwise) or
operations of Avnet and its Consolidated Subsidiaries or the ability of
any Borrower to perform its respective obligations under the Loan
Documents to which it is a party, and (C) the current Debt Ratings in
respect of Long-Term Debt;
(vii) an opinion of counsel to Avnet in form and substance
satisfactory to the Administrative Agent addressing the matters set forth
on Exhibit I;
(viii) evidence that (A) all amounts outstanding and owing under the
Prior Credit Facilities (including all principal, interest, fees and
expenses) have been or concurrently with the Closing Date are being repaid
or paid, (B) all commitments of the lenders party to the Prior Credit
Facilities have been terminated, and (C) all Liens securing obligations
under the Prior Credit Facilities have been or concurrently with the
Closing Date are being released; and
(ix) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, the Swing Line
Lender or the Required Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall
have been paid.
(c) Unless waived by the Administrative Agent, Avnet shall have paid all
Attorney Costs of the Administrative Agent and the Arranger to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute the Administrative Agent's reasonable
estimate of Attorney Costs incurred or to be incurred by it
49
through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between Avnet and the
Administrative Agent or Avnet and the Arranger).
(d) The Closing Date shall occur on or prior to October 25, 2001.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender
to honor any Request for Credit Extension (other than a Request for Credit
Extension requesting only a conversion of Loans to the other Type or a
continuation of Loans as the same Type) is subject to the following conditions
precedent:
(a) The representations and warranties of Avnet contained in Article V,
or which are contained in any document furnished at any time under or in
connection herewith, shall be true and correct on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.
(b) No Default or Event of Default shall exist, or would result from
such proposed Credit Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
(d) If the applicable Borrower is a Designated Borrower, then the
conditions of Section 9.10 to the designation of such Borrower as a Designated
Borrower shall have been met to the reasonable satisfaction of the
Administrative Agent.
Each Request for Credit Extension (other than a Request for Credit
Extension requesting only a conversion of Loans to the other Type or a
continuation of Loans as the same Type) shall be deemed to be a representation
and warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Avnet represents and warrants that:
5.01 CORPORATE EXISTENCE AND POWER. Avnet and each of its Subsidiaries
are corporations duly incorporated, validly existing and in good standing under
the laws of their respective jurisdictions of incorporation or organization and
have all corporate (or equivalent) powers and all material governmental
licenses, authorizations, consents and approvals required to carry on their
respective businesses as now conducted.
5.02 CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION. The
execution and delivery by each of the Borrowers of this Agreement (and, in the
case of any Designated Borrower, of the applicable Designated Borrower
Certificate) and by the Guarantor
50
of the Guaranty Agreement and the performance by the Loan Parties of their
respective obligations hereunder or thereunder are within the corporate (or
equivalent) power of each such Loan Party, have been duly authorized by all
necessary corporate (or other) action, require no action by or in respect of, or
filing with, any governmental body, agency or official (except for any such
action or filing that has been taken and is in full force and effect) and do not
contravene, or constitute a default under, any provision of applicable law or
regulation (except such violations not having a material adverse effect on any
Loan Party) or of the Organizational Documents of any Loan Party, or of any
material agreement, judgment, injunction, order, decree or other material
instrument binding upon any Loan Party.
5.03 BINDING EFFECT. This Agreement constitutes a legal, valid and
binding obligation of each Borrower, enforceable against each such Borrower in
accordance with its terms. The Guaranty Agreement when executed and delivered by
the Guarantor will constitute, a legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms.
5.04 FINANCIAL INFORMATION. Avnet has furnished the Lenders with its
audited consolidated statement of financial position as of June 29, 2001
together with the related consolidated statement of earnings, cash flows and
stockholders' equity as of June 29, 2001. Such financial statements (including
any related schedules and/or notes) are true and correct in all material
respects (subject, as to interim statements, to changes resulting from audits
and year-end adjustments), have been prepared in accordance with GAAP and show
all liabilities of Avnet and its Consolidated Subsidiaries required to be shown
in accordance with GAAP. The balance sheet of Avnet and its Consolidated
Subsidiaries included with such audited statement of financial position fairly
presents the condition of Avnet and its Consolidated Subsidiaries as at the date
thereof, and the statement of income and statement of cash flows fairly present
the results of the operations and cash flows of Avnet and its Consolidated
Subsidiaries for the periods indicated. Since June 29, 2001, there has been no
material adverse change in or to the property, assets, business, condition
(financial or otherwise) or operations of Avnet and its Consolidated
Subsidiaries or the ability of any Borrower to perform its obligations under
this Agreement.
5.05 LITIGATION. Except as set forth on Schedule 5.05, there is no
action, suit or proceeding pending against, or to the knowledge of Avnet
threatened against or affecting, Avnet or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which would materially
adversely affect the business or the consolidated results of operations of Avnet
and its Subsidiaries, or which in any manner draws into question the validity of
any Loan Document.
5.06 COMPLIANCE WITH ERISA, TAXES.
(a) Except as set forth on Schedule 5.06, each member of the ERISA Group
has fulfilled its obligations in all material respects under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code with respect to each Plan. No member of the ERISA Group has (i) sought
a waiver of the minimum funding standard under Section 412 of the Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or
51
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which in either event has resulted
or could reasonably be expected to result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Code or (iii) incurred
any liability under Title IV of ERISA other than a liability to the PBGC for
premiums or similar items under Section 4007 of ERISA.
(b) Avnet and its Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP.
5.07 ENVIRONMENTAL MATTERS. Except as disclosed in public filings made by
Avnet with the Securities and Exchange Commission or except as set forth on
Schedule 5.07:
(a) No written notice, notification, demand, request for information,
citation, summons, complaint or order has been issued or filed, no penalty has
been assessed in any material amount and to the best knowledge of Avnet, no
investigation or review is pending or threatened by any governmental or other
entity that could reasonably be expected to result in a material adverse effect
to Avnet and its Subsidiaries taken as a whole, (i) with respect to any alleged
violation of any Environmental Laws in connection with the conduct of Avnet or
any of its Subsidiaries and relating to a Hazardous Substance or (ii) with
respect to any alleged failure to have any permit, certificate, license,
approval, registration or authorization required in connection with the conduct
of Avnet or any of its Subsidiaries relating to a Hazardous Substance or (iii)
with respect to any generation, treatment, storage, recycling, transportation,
disposal, or release (including a release as defined in 42 U.S.C. Section
9601(22)) ("Release") of a Hazardous Substance used by Avnet or any of its
Subsidiaries, which alleged violation, alleged failure to have any required
permit, certificate, license, approval, or registration, or generation,
treatment, storage, recycling, transportation, disposal or release, individually
or in the aggregate, is reasonably likely to result in liability to Avnet and/or
any of its Subsidiaries in excess of $35,000,000 individually or in the
aggregate.
(b) (i) To the best of Avnet's knowledge, there has been no Release of a
Hazardous Substance at, on or under any property used in by Avnet or any of its
Subsidiaries or for which Avnet or any of its Subsidiaries would be liable,
which Release, individually or in combination with other such Releases on such
property, is reasonably likely to result in liability to Avnet and/or any of its
Subsidiaries in excess of $35,000,000 individually or in the aggregate; (ii) to
the best of Avnet's knowledge, neither Avnet nor any of its Subsidiaries has,
other than as a generator or in a manner not regulated under the Environmental
Laws, handled any "hazardous waste" (as defined in 42 U.S.C. Section 6903(5)) on
any property used by Avnet or any of its Subsidiaries or for which Avnet or any
of its Subsidiaries would be liable; (iii) to the best of Avnet's knowledge, no
polychlorinated biphenyl ("PCB") in concentrations greater than 50 parts per
million, friable asbestos, or underground storage tank (in use or abandoned) is
at any property used by Avnet or any of its Subsidiaries or for which Avnet or
any of its Subsidiaries would be liable, except for such PCBs, friable asbestos
or underground storage tanks that are not reasonably likely, individually or in
the aggregate, to result in liability to Avnet and/or any of its
52
Subsidiaries in excess of $35,000,000 individually or in the aggregate; and (iv)
to the best of Avnet's knowledge, no unreported Hazardous Substance is present
in a threshold planning quantity where such quantity has been established
pursuant to the Federal Emergency Planning and Community Right to Know Act of
1986.
(c) To the best knowledge of Avnet, neither Avnet nor any of its
Subsidiaries has transported or arranged for the transportation (directly or
indirectly) of any Hazardous Substance to any location which is listed or
proposed for listing under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the Comprehensive
Environmental Response, Compensation and Liability Information System, as
amended ("CERCLIS"), or on any similar state list or which is the subject of any
federal, state or local enforcement action or other investigation which may lead
to claims for clean-up costs, remedial work, damages to natural resources or for
personal injury claims, including, but not limited to, claims under CERCLA that
are reasonably likely, individually or in the aggregate, to result in liability
to Avnet and/or any of its Subsidiaries in excess of $35,000,000 individually or
in the aggregate.
(d) No written notification of a Release of a Hazardous Substance has
been filed by or on behalf of Avnet or any of its Subsidiaries or with regard to
a Release not otherwise disclosed in Schedule 5.07, which Release, individually
or in combination with other such Releases, is reasonably likely to result in
liability for Avnet and/or any of its Subsidiaries in excess of $35,000,000
individually or in the aggregate.
(e) There have been no environmental audits or similar investigations
conducted by or which are in the possession of Avnet or any of its Subsidiaries
in relation to any property used by Avnet or any of its Subsidiaries or for
which Avnet or any of its Subsidiaries would be liable, which identify one or
more environmental liabilities of Avnet and/or any of its Subsidiaries not
otherwise disclosed in Schedule 5.07 and which are reasonably likely to exceed
$35,000,000 individually or in the aggregate.
5.08 DISCLOSURE. No statement, information, report, representation, or
warranty made by Avnet or any of its Subsidiaries herein or in any document
executed in connection herewith or furnished to the Administrative Agent or any
Lender by or on behalf of any Borrower in connection herewith or any document
executed in connection herewith contains any untrue statement of a material fact
or omits any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
5.09 SUBSIDIARIES. Set forth on Schedule 5.09 is a complete and accurate
list of all of the Subsidiaries of Avnet as of the Closing Date, showing as to
each such Subsidiary the percentage of the outstanding shares of each class of
capital stock owned (directly or indirectly) by Avnet or any other Subsidiary of
Avnet. All of the outstanding capital stock or other equity interests of all of
such Subsidiaries have been validly issued, are fully paid and non-assessable
and, except as set forth on Schedule 5.09, are owned directly or indirectly by
Avnet or any of its Subsidiaries (other than directors' qualifying shares or
nominee shares which are required for Foreign Subsidiaries pursuant to local
law), as the case may be, free and clear of all Liens other than a Lien
permitted by Section 6.07 hereof. Each corporate Subsidiary of Avnet is a
53
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate powers and has
obtained all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted except for those
whose absence has not had a material adverse effect on such Subsidiary.
5.10 NOT AN INVESTMENT COMPANY. Neither Avnet nor any of its Subsidiaries
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
5.11 MARGIN STOCK. Neither Avnet nor any of its Subsidiaries is engaged
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no proceeds of any Loan or L/C Borrowing, nor any Letter of
Credit, will be used to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin Stock in
violation of Regulation U, Regulation T or Regulation X.
5.12 COMPLIANCE WITH LAWS. Except as set forth on Schedule 5.12 or as
previously disclosed in writing to the Lenders, Avnet and each of its
Subsidiaries are in compliance in all material respects with all applicable
laws, rules and regulations, and is not in violation of, or in default under,
any term or provision of any charter, bylaw, mortgage, indenture, agreement,
instrument, statute, rule, regulation, judgment, decree, order, writ or
injunction applicable to it, except for any such violations, defaults or
failures to comply which would not be reasonably be expected, individually or in
the aggregate, to have a material adverse effect on the business, financial
position or results of operations of Avnet and its Subsidiaries taken as a
whole, or on the ability of any Loan Party to perform its obligations under any
Loan Document.
5.13 NO MATERIAL ADVERSE CHANGE. During the period commencing on June 29,
2001 through and including the Closing Date no event has occurred which has or
would reasonably be likely to have a material adverse effect on the business,
assets, condition (financial or otherwise) or prospects of Avnet and its
Subsidiaries, taken as a whole.
5.14 ABSENCE OF LIENS AND ENCUMBRANCES. There are no mortgages, deeds of
trust, pledges, liens, security interests or charges or encumbrances (including
liens or retained security titles of conditional vendors) of any nature
whatsoever on any properties or assets of Avnet or any of its Subsidiaries,
except as otherwise permitted under Section 6.07 hereof.
5.15 DEBT. Other than as set forth in Avnet's financial statements dated
June 29, 2001 and other than any individual item of Debt not exceeding
$15,000,000, there is no Debt of Avnet or any of its Subsidiaries outstanding as
of the Closing Date except as set forth on Schedule 5.15.
5.16 CONTINGENT LIABILITIES. To the best of Avnet's knowledge after due
inquiry, other than as previously disclosed by Avnet to the Lenders in writing,
there are no material contingent liabilities of Avnet or its Subsidiaries as of
the Closing Date which would be reasonably likely to have a material adverse
effect on the financial condition of Avnet and its Subsidiaries taken as a
whole.
5.17 INVESTMENTS. Set forth on Schedule 5.17 is a complete and accurate
list as of the Closing Date of all Investments by Avnet or any of its
Subsidiaries in any Person, other than
54
(a) Permitted Investments and (b) investments by Avnet or any of its
Subsidiaries in a Subsidiary.
ARTICLE VI.
COVENANTS
Avnet hereby covenants and agrees that so long as this Agreement is in
effect and until the Loans, together with interest, fees and other obligations
hereunder, have been paid in full and the Commitments hereunder shall have
terminated, Avnet shall, and shall cause its Subsidiaries to, perform and comply
with the following covenants:
6.01 INFORMATION. Avnet shall mail or deliver (subject to the last
paragraph of this Section 6.01) to the Administrative Agent and each of the
Lenders:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of Avnet, a consolidated balance sheet of Avnet and its
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income and of cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, and,
with respect to such financial information for Avnet and its Subsidiaries, such
consolidated statements shall be audited statements by Xxxxxx Xxxxxxxx LLP or
other independent public accountants of nationally recognized standing and
containing an unqualified opinion of such accountants;
(b) as soon as available and in any event within 60 days after the end
of each of the first three Fiscal Quarters of each fiscal year of Avnet, a
consolidated balance sheet of Avnet and its Subsidiaries as of the end of such
quarter and the related consolidated statements of income for such quarter and
for the portion of Avnet's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of the previous fiscal year, all certified
(subject to normal year-end audit adjustments and the absence of footnotes) as
to fairness of presentation, GAAP and consistency by the chief financial
officer, the chief accounting officer or the treasurer of Avnet;
(c) simultaneously with the delivery of each set of financial statements
referred to in subsections (a) and (b) of this Section, and on the Maturity
Date, a Compliance Certificate signed by a Responsible Officer of Avnet (i)
stating whether, to the best of such officer's knowledge after due inquiry,
there exists on the date of such certificate any Default or Event of Default
and, if any Default or Event of Default then exists, setting forth the details
thereof and the action that Avnet is taking or proposes to take with respect
thereto, (ii) containing calculations of the financial covenants set forth in
Section 6.11 and the covenant set forth in Section 6.15, (iii) setting forth (A)
the amount contemplated by Section 2.09(c)(ii)(A), and (B) the aggregate amount
of Attributable Indebtedness of any Securitization Subsidiary outstanding as of
the last day of such Fiscal Quarter, and (iv) stating whether, since the date of
the most recent financial statements previously delivered pursuant to subsection
(a) or (b) of this Section, there has been a change in GAAP applied in preparing
the financial statements then being delivered from those applied in preparing
the most recent audited financial statements so delivered which is material to
the financial statements then being delivered;
55
(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements whether anything has come to their
attention to cause them to believe that any Default under Section 6.11 existed
and continued to exist on the date of such statements;
(e) within fifteen Business Days after any Responsible Officer obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the treasurer, controller or chief financial officer of Avnet setting forth the
details thereof and the action which Avnet is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the shareholders of Avnet or
any of its Subsidiaries generally, copies of all financial statements, reports
and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which Avnet or any of its Subsidiaries shall have filed with the
Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of the incurrence of
complete or partial withdrawal liability with respect to any Multi-employer Plan
under Title IV of ERISA or notice that any Multi-employer Plan is in
reorganization, is not solvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of its intent to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security under ERISA or the Code, a certificate
of the chief financial officer or the chief accounting officer of Avnet setting
forth details as to such occurrence and action, if any, which Avnet or any
applicable member of the ERISA Group is required or proposes to take;
(i) as soon as reasonably practicable after any Responsible Officer
obtains knowledge of the commencement of, or of a material threat of the
commencement of, an action, suit or proceeding against Avnet or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable likelihood of an adverse decision which
would after the application of applicable insurance materially and adversely
affect the business, financial position, results of operations or prospects of
Avnet and its Consolidated Subsidiaries, in each case considered as a whole, or
which in any manner questions
56
the validity of any Loan Document, a written report informing the Lenders in
reasonable detail of the nature of such pending or threatened action, suit or
proceeding and will provide such additional information as may be reasonably
requested by the Administrative Agent at the request of any Lender;
(j) the commencement of any material litigation or proceeding against
Avnet or any Subsidiary relating to any Environmental Laws; or
(k) from time to time such additional information regarding the
financial position or business of Avnet and its Subsidiaries, as the
Administrative Agent or any Lender may reasonably request.
Reports required to be delivered pursuant to Sections 6.01(a), (b), (f) (to the
extent any such financial statements, reports or proxy statements are included
in materials otherwise filed with the SEC) or (g) may be delivered
electronically and if so, shall be deemed to have been delivered on the date on
which Avnet posts such reports either: (i) on Avnet's website on the Internet at
the website address listed on Schedule 9.02 hereof; or (ii) when such report is
posted electronically on IntraLinks/IntraAgency or other relevant website
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent), if any, on Avnet's behalf; provided that: (x) Avnet shall
deliver paper copies of such reports to the Administrative Agent or any Lender
who requests Avnet to deliver such paper copies until written request to cease
delivering paper copies is given by the Administrative Agent or such Lender; (y)
Avnet shall notify (which may be by facsimile or electronic mail) the
Administrative Agent and each Lender of the posting of any such reports; and (z)
in every instance Avnet shall provide paper copies of the Compliance
Certificates required by subsection (c) above to the Administrative Agent and
each of the Lenders. Except for such Compliance Certificates, the Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the reports referred to above, and in any event shall have no responsibility to
monitor compliance by Avnet with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such reports.
6.02 PAYMENT OF OBLIGATIONS. Avnet shall pay and discharge, and shall
cause each of its Subsidiaries to pay and discharge, at or before maturity, all
its respective material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith or where Avnet or the applicable Subsidiary is requesting an extension in
good faith, and will maintain, and will cause each Subsidiary to maintain, in
accordance with GAAP, appropriate reserves for the accrual of any of the same.
6.03 MAINTENANCE OF PROPERTY; INSURANCE
(a) Avnet shall keep, and shall cause each of its Subsidiaries to keep,
all property materially useful and necessary in its business in good working
order and condition, ordinary wear and tear excepted.
(b) Avnet shall maintain, and shall cause each of its Subsidiaries to
maintain, with financially sound and responsible insurance companies or through
self-insurance, insurance on all their respective properties in at least such
amounts and against such risks (and with such risk
57
retention) as are usually insured against in the same general area by companies
of established repute engaged in the same or a similar business; and will
furnish to the Lenders, upon request from the Administrative Agent, information
presented in reasonable detail as to the insurance so carried.
6.04 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Avnet will
continue and will cause each Subsidiary (other than a Subsidiary which is a
Non-Core Subsidiary) and each division (other than a division which is a
Non-Core Division) to continue, to engage in business of the same general type
as now conducted by Avnet and each of its Subsidiaries and each of its
divisions, and will preserve, renew and keep in full force and effect, and will
cause each of its Subsidiaries (other than a Subsidiary which is a Non-Core
Subsidiary) to preserve, renew and keep in full force and effect their
respective corporate existences and, except for any such rights, privileges and
franchises the failure to preserve which would not in the aggregate have a
material adverse effect on Avnet and its Subsidiaries taken as a whole or the
ability of any Loan Party to perform any of its obligations under any Loan
Document; provided that nothing in this Section 6.04 shall prohibit (a) (i) the
merger of a Subsidiary of Avnet into Avnet, (ii) the merger of any Designated
Borrower into another Designated Borrower or (iii) the merger or consolidation
of any Subsidiary of Avnet which is not a Designated Borrower with or into
another Person if (A) the corporation surviving such consolidation or merger is
a Wholly-Owned Consolidated Subsidiary of Avnet, (B) in respect of any such
merger involving a Designated Borrower, such Designated Borrower is the
surviving entity and (C) such merger or consolidation is not prohibited by
Section 6.14(h); provided that, in each case (i), (ii) and (iii), after giving
effect to any such merger or consolidation, no Default or Event of Default shall
have occurred and be continuing and (b) the termination of the corporate (or
equivalent) existence of any Subsidiary of Avnet that is not a Designated
Borrower or the discontinuation or alteration of any line of business of Avnet
or any of its Subsidiaries if Avnet in good faith determines that such
termination or alteration is in the best interest of Avnet or such Subsidiary,
as the case may be, and if such termination or alteration is not materially
disadvantageous to the Lenders.
6.05 COMPLIANCE WITH LAWS. Avnet shall comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of Governmental Authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) the failure to comply with which would have a material
adverse effect on Avnet and its Subsidiaries taken as a whole or the ability of
any Loan Party to perform any of its obligations under any Loan Document, except
where the necessity of compliance therewith is contested in good faith.
6.06 INSPECTION OF PROPERTY, BOOKS AND RECORDS. Avnet shall keep, and
shall cause each of its Subsidiaries to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and, except to the
extent prohibited by applicable law, rule, regulations or orders, will permit,
and will cause each of its Subsidiaries to permit, representatives of any Lender
at such Lender's expense to visit and inspect any of its respective properties,
to examine and make abstracts from any of its respective books and records and
to discuss its respective affairs, finances and accounts with its respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired.
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6.07 NEGATIVE PLEDGE. Avnet shall not nor will it permit any of its
Subsidiaries to create, assume or suffer to exist any Lien on any asset
(including revenues) now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on such date and, in the case of any individual item of such secured
Debt exceeding $15,000,000, as set forth in the Audited Financial Statements or
as set forth on Schedule 6.07;
(b) any Lien on any fixed asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such asset;
provided that such Lien attached to such asset concurrently with or within 90
days after the acquisition thereof;
(c) Liens on inventory acquired in the ordinary course of business to
secure the purchase price of such inventory or to secure indebtedness incurred
solely for the purpose of financing the acquisition of such inventory;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business and
which are not overdue for a period of more than 30 days or which are being
contested in good faith;
(e) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith;
(f) Liens imposed by law on pledges or deposits in connection with
workmen's compensation, unemployment insurance and other social security
legislation (other than ERISA) which do not interfere with or adversely affect
in any material respect the ordinary conduct of the business of Avnet or any of
its Subsidiaries;
(g) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety bonds (other than in relation to judgments),
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(h) easements, right-of-way, zoning and similar restrictions and other
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business, which do not interfere with or
adversely affect in any material respect the ordinary conduct of the business of
Avnet and its Subsidiaries taken as a whole;
(i) any Lien arising pursuant to this Agreement;
(j) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien, to the extent such Lien is permitted
by any of the foregoing clauses of this Section; provided that such Debt is not
increased and is not secured by any additional assets;
(k) the interest of a purchaser of Permitted Receivables acquired
pursuant to, or any Lien on the assets of a Securitization Subsidiary granted
pursuant to, one or more Permitted Securitizations resulting in Attributable
Indebtedness in an aggregate amount not exceeding $750,000,000 at any one time
for all such Permitted Securitizations together; and
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(l) other Liens (other than Liens incurred in connection with a
Permitted Securitization); provided that the aggregate amount of Debt secured by
all such Liens together shall not exceed $75,000,000 at any time.
6.08 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
(a) Avnet shall not, nor shall it permit any of its Subsidiaries to,
consolidate or merge with or into any other Person except as permitted in
accordance with Section 6.04 and except for the merger of any Person into Avnet,
provided that (i) Avnet is the surviving entity and (ii) after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing.
(b) Avnet shall not, nor shall it permit any of its Subsidiaries to,
make any Asset Sale, except a sale or transfer of Permitted Receivables pursuant
to one or more Permitted Securitizations resulting in Attributable Indebtedness
in an aggregate amount not exceeding $750,000,000 at any one time for all such
Permitted Securitizations together.
6.09 USE OF PROCEEDS. Avnet shall, and shall cause each other Borrower
to, use the proceeds of any Credit Extension made to such Borrower to finance
the general corporate purposes of such Borrower (including back-up of commercial
paper and acquisitions otherwise permitted hereunder).
6.10 ORGANIZATIONAL DOCUMENTS. Subject to changes otherwise expressly
permitted hereunder (including any permitted dissolutions pursuant to this
Agreement), Avnet shall not, nor shall it permit any of its Subsidiaries to,
amend its Organizational Documents in any manner which reasonably could
adversely affect the rights of the Lenders under any Loan Document or their
ability to enforce the same.
6.11 FINANCIAL COVENANTS.
(a) Minimum Interest Coverage Ratio. Avnet and its Subsidiaries shall
maintain, as of the end of each Fiscal Quarter set forth below (commencing with
the Fiscal Quarter ending nearest September 30, 2001), a ratio of EBITDA to
Interest Expense (computed for the four Fiscal Quarter period then ending) of no
less than the correlative ratios set forth below:
QUARTERLY PERIOD MINIMUM INTEREST COVERAGE RATIO
---------------- -------------------------------
Fiscal Quarter ending nearest September 30, 2001 1.75 to 1.00
Fiscal Quarter ending nearest December 31, 2001 1.75 to 1.00
Fiscal Quarter ending nearest March 31, 2002 1.75 to 1.00
Fiscal Quarter ending nearest June 30, 2002 2.00 to 1.00
Fiscal Quarter ending nearest September 30, 2002 2.25 to 1.00
Fiscal Quarter ending nearest December 31, 2002 2.50 to 1.00
Fiscal Quarter ending nearest March 31, 2003 2.75 to 1.00
Fiscal Quarter ending nearest June 30, 2003 3.00 to 1.00
Fiscal Quarter ending nearest September 30, 2003 3.25 to 1.00
Fiscal Quarter ending nearest December 31, 2003
and thereafter 3.50 to 1.00
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(b) Minimum Net Worth. Avnet and its Subsidiaries on a consolidated
basis shall maintain as of the end of each Fiscal Quarter (commencing with the
Fiscal Quarter ending nearest September 30, 2001) Net Worth not less than the
sum of (i) an amount equal to 85% of Net Worth as of the last day of the Fiscal
Quarter ended nearest June 30, 2001 plus (ii) 50% of positive Net Income
(without deduction for loss) for each Fiscal Quarter ending subsequent to the
Fiscal Quarter ended nearest June 30, 2001 plus (iii) 50% of any increase in
shareholders' equity (as determined in accordance with GAAP) resulting from any
issuance of capital stock from and after the last day of the Fiscal Quarter
ended nearest June 30, 2001.
(c) Maximum Leverage Ratio. Avnet and its Subsidiaries shall not permit
the Leverage Ratio at any time to be greater than 55%.
6.12 LIMITATIONS ON FUNDED DEBT. Avnet shall not, nor shall it permit any
of its Subsidiaries to, incur any Funded Debt unless (a) at the time such Funded
Debt is incurred, no Default or Event of Default exists and (b) after giving
effect to the incurrence of such Funded Debt on a pro forma basis as if such
Funded Debt had been incurred on the first day of the four Fiscal Quarter period
most recently ended, each of the covenants in Section 6.11 shall be satisfied.
6.13 PARI PASSU. All the payment obligations of each Borrower arising
under or pursuant to this Agreement will at all times rank pari passu with all
other unsecured and unsubordinated payment obligations and liabilities
(including contingent obligations and liabilities) of such Borrower (other than
those which are mandatorily preferred by laws or regulations of general
application).
6.14 INVESTMENTS. Avnet shall not, nor shall it permit any of its
Subsidiaries to, acquire or hold any Investments other than:
(a) Investments existing on the date hereof and listed on Schedule 5.17;
(b) Permitted Investments;
(c) advances to officers, directors and employees of Avnet and its
Subsidiaries in an aggregate amount not to exceed $2,500,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments of any Subsidiary in Avnet or another Subsidiary;
(e) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;
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(f) servicer advances made pursuant to one or more Permitted
Securitizations, each for a term not exceeding three months, not to exceed
$750,000,000 in the aggregate at any time for all such advances then outstanding
and undertaken pursuant to one or more Permitted Securitizations;
(g) investments in a Securitization Subsidiary pursuant to one or more
Permitted Securitizations resulting in Attributable Indebtedness in an aggregate
amount not exceeding $750,000,000 at any one time for all such Permitted
Securitizations together;
(h) acquisitions of all or substantially all of the assets or business
of any other Person engaged in the same or similar business as Avnet, or of a
division of a Person engaged in such a business, or of ownership or control of
at least a majority of all the Voting Stock of such a Person (together, an
"Acquisition"); provided that (i) no Default or Event of Default exists or would
exist before or after giving effect to such Acquisition, (ii) the board of
directors or other governing body of such Person whose property or Voting Stock
is being so acquired has approved the terms of such Acquisition, (iii) on or
before 20 days prior to consummation of such Acquisition, Avnet can demonstrate
to the Lenders that (on a pro forma basis as to the financial covenants set
forth in Section 6.11, as set forth in a Compliance Certificate signed by a
Responsible Officer of Avnet and delivered to the Administrative Agent) after
giving effect to such Acquisition it will continue to comply through the term of
this Agreement with all the terms and conditions of each Loan Document, (iv)
total cash consideration (including deferred payments) paid or payable by Avnet
and its Subsidiaries in connection with any and all Acquisitions consummated
after the Closing Date does not exceed together in the aggregate (A)
$150,000,000 for all such Acquisitions consummated during the four Fiscal
Quarter period commencing on or about October 1, 2001, (B) $250,000,000 for all
such Acquisitions consummated during the four Fiscal Quarter period commencing
on or about October 1, 2002, and (C) $350,000,000 for all such Acquisitions
consummated thereafter, and (v) Avnet has provided to the Administrative Agent
and the Lenders such financial and other information regarding the Person whose
property or Voting Stock is being so acquired, including historical financial
statements, and a description of such Person, as the Administrative Agent or the
Required Lenders has reasonably requested;
(i) Investments of Avnet in any Subsidiary, provided that any such
Investment shall not be undertaken in contemplation of or for the purpose of
consummating an Acquisition, except to the extent otherwise permitted by
subsection (h) above;
(j) Investments constituting obligations or entitlements (contingent or
otherwise) of Avnet or any of its Subsidiaries existing or arising under any
rate swap, basis swap, forward rate transaction, equity or equity index swap or
option, bond, note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option, or any other, similar
transaction (including any option to enter into any of the foregoing) that is
entered into by such Person in the ordinary course of business for the purpose
of directly mitigating risks associated with liabilities, commitments or assets
held, or reasonably anticipated, by such Person, or changes in the value of
securities issued by such Person in conjunction with a securities repurchase
program not otherwise prohibited hereunder, and not for purposes of speculation
or taking a "market view" (each, a "Permitted Hedge Transaction"); and
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(k) Investments not otherwise permitted hereunder and not constituting
Acquisitions, provided that the aggregate amount of such other Investments made
during any four consecutive Fiscal Quarters shall not exceed $50,000,000 for all
such Investments together.
6.15 CAPITAL EXPENDITURES. Avnet shall not, nor shall it permit any of
its Subsidiaries to, make or become legally obligated to make any expenditure in
respect of the purchase or other acquisition of any fixed or capital asset
(excluding normal replacements and maintenance which are properly charged to
current operations), except for capital expenditures made in the ordinary course
of business and not exceeding (a) $150,000,000 in the aggregate for all such
capital expenditures together during any four consecutive Fiscal Quarter period
ending on or prior to the last day of the Fiscal Quarter ending nearest June 30,
2002, or (b) $160,000,000 in the aggregate for all such capital expenditures
together during any four consecutive Fiscal Quarter period ending on or after
September 30, 2002; provided that Avnet and its Subsidiaries may make or become
legally obligated to make capital expenditures in the ordinary course of
business not exceeding (x) $225,000,000 in the aggregate for all such capital
expenditures together during any four consecutive Fiscal Quarter period as of
the last day of which Avnet has maintained a ratio of EBITDA to Interest Expense
(computed for the four Fiscal Quarter period then ending) equaling or exceeding
3.50 to 1.00, or (y) $300,000,000 in the aggregate for all such capital
expenditures together during any four consecutive Fiscal Quarter period as of
the last day of which Avnet has maintained a ratio of EBITDA to Interest Expense
(computed for the four Fiscal Quarter period then ending) equaling or exceeding
4.00 to 1.00.
ARTICLE VII.
EVENTS OF DEFAULT
7.01 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an event of default hereunder (individually, an "Event of
Default" and collectively, the "Events of Default"):
(a) Any Borrower shall fail to pay (i) when due any principal of any
Loan or L/C Borrowing taken by such Borrower or (ii) within five days after the
same shall become due, any interest on any Loan or L/C Borrowing, taken by such
Borrower or any fees or any other amount payable by such Borrower hereunder;
(b) Any Borrower shall fail to observe or perform any covenant contained
in Section 6.01 hereof (other than in Section 6.01(f) hereof) for 15 days after
written notice of such failure shall have been given to Avnet by the
Administrative Agent or any Lender;
(c) Any Borrower shall fail to observe or perform any covenant contained
in Sections 6.01(f), 6.07, 6.08, 6.09, 6.11 and 6.12 hereof;
(d) Any Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b) or (c) above) for 30 days after written notice of such failure shall have
been given to Avnet by the Administrative Agent or any Lender;
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(e) Any representation, warranty, certification or statement made or
deemed made by (i) any Borrower in this Agreement or in any certificate,
financial statement or other document delivered pursuant hereto or (ii) by the
Guarantor in the Guaranty Agreement, shall prove to have been incorrect in any
material respect when made (or deemed made);
(f) Any Borrower or any Material Subsidiary shall fail to make any
payment (including an interest payment) when due or within any applicable grace
period in respect of any Debt or obligation in excess of $35,000,000;
(g) Any event or condition shall occur which (i) results in the
acceleration of the maturity of any Debt or obligation of any Borrower or any
Material Subsidiary in excess of $35,000,000 or (ii) enables the Person to whom
any such Debt or obligation is owed, or any Person acting on such Person's
behalf, to accelerate the maturity thereof;
(h) Any Borrower shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any Debtor Relief Laws now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(i) An involuntary case or other proceeding shall be commenced against
any Borrower seeking liquidation, reorganization or other relief with respect to
it or its debts under any Debtor Relief Law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against any Borrower
under the federal bankruptcy laws as now or hereafter in effect;
(j) Any Borrower shall admit its inability to pay its debts as and when
they fall due, or convenes a meeting of its creditors for the purpose of
proposing, or otherwise proposes or enters into, any composition or arrangement
with its creditors or any group or class thereof, or anything analogous to, or
having a substantially similar effect to, any of the events specified in this
subsection (j) or in subsections (h) or (i) above occurs in any jurisdiction;
(k) This Agreement or any document executed in connection herewith, at
any time after its execution and delivery and for any reason other than the
agreement of all the Lenders or satisfaction in full of all obligations incurred
hereby or in connection herewith, ceases to be in full force and effect, or is
declared by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect; or any Loan Party denies that it has any or
further liability or obligation under this Agreement or any document executed in
connection herewith, or purports to revoke, terminate or rescind this Agreement
or any document executed in connection herewith; or
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(l) The occurrence of any of the following events with respect to any
Material Subsidiary that is not a Designated Borrower and the same shall not
have been cured or otherwise remedied to the satisfaction of the Required
Lenders within 10 days:
(i) Any such Person shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any Debtor Relief Laws now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to
authorize any of the foregoing;
(ii) An involuntary case or other proceeding shall be commenced
against any such Person seeking liquidation, reorganization or other
relief with respect to it or its debts under any Debtor Relief Laws now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against any such Person under the federal
bankruptcy laws as now or hereafter in effect; or
(iii) Any such Person shall admit its inability to pay its debts as
and when they fall due, or convenes a meeting of its creditors for the
purpose of proposing, or otherwise proposes or enters into, any
composition or arrangement with its creditors or any group or class
thereof, or anything analogous to, or having a substantially similar
effect to, any of the events specified in this clause (iii) or in clause
(i) or (ii) above occurs in any jurisdiction;
(m) Any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $50,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate any Plan
which is then a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to administer any
Plan which is then a Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any Plan
which is then a Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multi-employer Plans which
could cause one or more members of the ERISA Group to incur a current payment
obligation, that is, an obligation or series of obligations payable within 12
months, in excess of $50,000,000;
(n) An uninsured judgment or order for the payment of money in excess of
$50,000,000 shall be rendered against Avnet or any of its Subsidiaries and such
judgment or order shall continue unsatisfied and unstayed for a period of 30
days;
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(o) There occurs a Change of Control; or
(p) The guaranty given by the Guarantor pursuant to the Guaranty
Agreement shall cease to be in full force and effect at any time, or the
Guarantor or any Person acting for or on behalf of the Guarantor shall deny or
disaffirm the Guarantor's obligations under the Guaranty Agreement.
7.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Required Lenders,
(a) declare the commitment of each Lender to make Loans to be
terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by each Borrower;
(c) require that the Borrowers Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(h) of (i) of Section 7.01, the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Borrowers to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case, without further
act of the Administrative Agent or any Lender.
ARTICLE VIII.
ADMINISTRATIVE AGENT
8.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
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Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for the benefits and immunities (i)
provided to the Administrative Agent in this Article VIII with respect to any
acts taken or omission suffered by the L/C Issuer in connection with Letters of
credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Administrative Agent" as used in this Article VIII included the L/C
Issuer with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to the L/C Issuer.
8.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
8.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
8.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel
67
(including counsel to any Loan Party), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or all the Lenders,
if required hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and participants. Where
this Agreement expressly permits or prohibits an action unless the Required
Lenders otherwise determine, the Administrative Agent shall, and in all other
instances, the Administrative Agent may, but shall not be required to, initiate
any solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions specified
in Section 4.01, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by the Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.
8.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or Avnet referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Article VII; provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
8.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrowers hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related
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Person and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrowers. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.
8.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have been caused
primarily by such Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs and costs and expenses
in connection with the use of IntraLinks, Inc. or other similar information
transmission systems in connection with this Agreement) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrowers. The undertaking in this Section shall survive termination of the
Aggregate Commitments, the payment of all Obligations hereunder and the
resignation or replacement of the Administrative Agent.
8.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
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8.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign
as Administrative Agent upon 30 days' notice to the Lenders; provided that any
such resignation by Bank of America shall also constitute its resignation as L/C
Issuer and Swing Line Lender. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders which successor administrative agent shall
be consented to by Avnet at all times other than during the existence of an
Event of Default (which consent of Avnet shall not be unreasonably withheld or
delayed). If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and Avnet, a
successor administrative agent from among the Lenders. Upon the acceptance of
its appointment as successor administrative agent hereunder, the Person acting
as such successor administrative agent shall succeed to all the rights, powers
and duties of the retiring Administrative Agent, L/C Issuer and Swing Line
Lender and the respective terms "Administrative Agent," "L/C Issuer" and "Swing
Line Lender" shall mean such successor administrative agent, letter of credit
issuer and swing line lender, and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated and
the retiring L/C Issuer's and Swing Line Lender's rights, powers and duties as
such shall be terminated (provided that the retiring Administrative Agent, L/C
Issuer or Swing Line Lender, as the case may be, shall retain all rights then
existing under Sections 8.07 and 9.05), without any other or further act or deed
on the part of such retiring L/C Issuer or Swing Line Lender or any other Lender
other than the obligation of the successor L/C Issuer to issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession. Notwithstanding the foregoing, after any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article VIII and Sections 9.04 and 9.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
8.10 OTHER AGENTS; LEAD MANAGERS. None of the Lenders identified on the
facing page or signature pages of this Agreement as a "syndication agent,"
"documentation agent," "co-agent" or "lead manager" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
the Lenders so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE IX.
MISCELLANEOUS
9.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by Avnet
or any other Loan Party therefrom, shall be effective unless in writing signed
by the Required Lenders and Avnet or the
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applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall, unless in writing and
signed by each Lender and by Avnet, and acknowledged by the Administrative
Agent, do any of the following:
(a) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 2.06), except for any such increase
made in accordance with Section 2.14;
(b) postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iii) of the proviso below)
any fees or other amounts payable hereunder or under any other Loan Document;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of "Default Rate" or to waive any obligation
of the Borrowers to pay interest at the Default Rate;
(d) change the percentage of the Aggregate Commitments or of the
aggregate unpaid principal amount of the Loans and L/C Obligations which is
required for the Lenders or any of them to take any action hereunder;
(e) change the Pro Rata Share or Voting Percentage of any Lender (except
for any change resulting from Section 2.14 or Section 3.06(b));
(f) amend this Section, or Section 2.13, or any provision herein
providing for consent or other action by all the Lenders; or
(g) release Avnet from the Guaranty Agreement;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer and Swing Line Lender in addition to the
Required Lenders or each directly-affected Lender, as the case may be, affect
the rights or duties of the L/C Issuer or Swing Line Lender under this
Agreement; (ii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Required Lenders or each
directly-affected Lender, as the case may be, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and (iii)
the Agent/Arranger Fee Letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the respective parties thereto.
Notwithstanding anything to the contrary herein, any Lender that has a Voting
Percentage of zero shall not have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Pro Rata Share of such
Lender may not be increased (except for any such increase resulting from Section
2.14 or Section 3.06(b)) without the consent of such Lender.
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9.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices on Schedule 9.02; or, in the case of Avnet, the
Administrative Agent, the L/C Issuer or the Swing Line Lender, to such other
address as shall be designated by such party in a notice to the other parties,
and in the case of any other party, to such other address as shall be designated
by such party in a notice to Avnet, the Administrative Agent, the L/C Issuer and
the Swing Line Lender. All such notices and other communications shall be deemed
to be given or made upon the earlier to occur of (i) actual receipt by the
intended recipient and (ii) (A) if delivered by hand or by courier, when signed
for by the intended recipient; (B) if delivered by mail, four Business Days
after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when
sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that notices and other
communications to the Administrative Agent, the L/C Issuer and the Swing Line
Lender pursuant to Article II shall be in writing (which may be by facsimile)
and shall not be effective until actually received by such Person. Any notice or
other communication permitted to be given, made or confirmed by telephone
hereunder shall be given, made or confirmed by means of a telephone call to the
intended recipient at the number specified on Schedule 9.02, it being understood
and agreed that a voicemail message shall in no event be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices and Swing Line Loan Notices) believed in good
faith to have been given by or on behalf of any Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrowers shall indemnify each Agent-Related Person and each Lender
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice believed in good faith to have been given by or on
behalf of any Borrower. All telephonic notices to and
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other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
9.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.04 ATTORNEY COSTS, EXPENSES AND TAXES. Avnet agrees (a) to pay or
reimburse the Administrative Agent for all costs and expenses reasonably
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs and costs and
expenses reasonably incurred (i) in connection with the use of IntraLinks, Inc.
or other similar information transmission systems in connection with this
Agreement, and (ii) in connection with any increase of Commitments requested
under Section 2.14, and (b) to pay or reimburse the Administrative Agent and
each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any "workout" or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender. The agreements in this Section shall survive the termination of the
Aggregate Commitments and repayment of all other Obligations.
9.05 INDEMNIFICATION BY AVNET. Whether or not the transactions
contemplated hereby are consummated, Avnet agrees to indemnify, save and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against: (a) any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by
any Person relating directly or indirectly to a claim, demand, action or cause
of action that such Person asserts or may assert against any Loan Party, any
Affiliate of any Loan Party or any of their respective officers or directors;
(b) any and all claims, demands, actions or causes of action that may at any
time (including at any time following repayment of the Obligations and the
resignation of the Administrative Agent or the replacement of any Lender) be
asserted or imposed against any Indemnitee, arising out of or relating to, the
Loan Documents, any predecessor loan documents, any Commitment, the use or
contemplated use of the proceeds of any Credit Extension, or the relationship of
any Loan Party, the Administrative Agent and the Lenders under this Agreement or
any other Loan Document; (c) any administrative or investigative proceeding by
any Governmental Authority arising out of or related to a claim,
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demand, action or cause of action described in subsection (a) or (b) above; and
(d) any and all liabilities (including liabilities under indemnities), losses,
costs or expenses (including Attorney Costs) that any Indemnitee suffers or
incurs (provided that costs and expenses of such Indemnitee's own counsel or
which are otherwise incurred at the election of such Indemnitee shall be
reasonable), as a result of the assertion of any foregoing claim, demand,
action, cause of action or proceeding, or as a result of the preparation of any
defense in connection with any foregoing claim, demand, action, cause of action
or proceeding, in all cases, and whether or not an Indemnitee is a party to such
claim, demand, action, cause of action or proceeding (all the foregoing,
collectively, the "Indemnified Liabilities"; provided that no Indemnitee shall
be entitled to indemnification for any claim to the extent that such claim is
determined in a final, nonappealable judgment by a court of competent
jurisdiction to have been caused primarily by such Indemnitee's own gross
negligence or willful misconduct). No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks, Inc. or other similar information transmission systems in
connection with this Agreement. The agreements in this Section shall survive the
termination of the Aggregate Commitments and repayment of all other Obligations.
9.06 PAYMENTS SET ASIDE. To the extent that any Borrower makes a payment
to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
9.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrowers may not assign or otherwise transfer
any of their respective rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrowers without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations and in Swing Line Loans) at
the time owing to it); provided that (i) except in the case of an assignment
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of the entire remaining amount of the assigning Lender's Commitment and the
Loans at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) subject to each such assignment, determined as of the
date the Assignment and Assumption Agreement with respect to such assignment is
delivered to the Administrative Agent, shall not be less than $5,000,000
Commitment, unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, Avnet otherwise consents (each such
consent not to be unreasonably withheld or delayed), (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned, except that this clause (ii) shall not
apply to rights in respect of outstanding Swing Line Loans, and (iii) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption Agreement, together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from and after
the effective date specified in each Assignment and Assumption Agreement, the
Eligible Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption Agreement, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.07, 9.04 and 9.05). Upon request, the Borrowers (at their
expense) shall execute and deliver new or replacement Notes to the assigning
Lender and the assignee Lender. Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this subsection
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d)
of this Section.
(c) The Administrative Agent, acting solely for this purpose as an agent
of the Borrowers, shall maintain at the Administrative Agent's Office a copy of
each Assignment and Assumption Agreement delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and L/C Obligations, owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to, the Borrowers or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans (including such Lender's participations in L/C Obligations
and/or Swing Line Loans) owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to
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the other parties hereto for the performance of such obligations and (iii) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
that would (i) postpone any date upon which any payment of money is scheduled to
be paid to such Participant, (ii) reduce the principal, interest, fees or other
amounts payable to such Participant, or (iii) release Avnet from the Guaranty
Agreement. Subject to subsection (e) of this Section, the Borrowers agree that
each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 9.11
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with Avnet's prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless Avnet is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrowers, to comply with Section 9.17 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) If the consent of Avnet to an assignment or to an Eligible Assignee is
required hereunder (including a consent to an assignment which does not meet the
minimum assignment threshold specified in clause (i) of the proviso to the first
sentence of Section 9.07(b)), Avnet shall be deemed to have given its consent
five Business Days after the date notice thereof has been delivered by the
assigning Lender (through the Administrative Agent) unless such consent is
expressly refused by Avnet prior to such fifth Business Day.
(h) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural Person)
approved by (i) the Administrative Agent, in the case of any assignment of a
Committed Loan, (ii) the L/C Issuer, (iii) the Swing Line Lender, and (iv)
unless (A) such Person is taking delivery of an assignment in connection with
physical settlement of a credit derivatives transaction or (B) an Event of
Default has
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occurred and is continuing, Avnet (each such approval referred to in clauses (i)
through (iv) not to be unreasonably withheld or delayed).
"Fund" means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
(i) Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 15 days' notice to Avnet and
the Lenders, resign as L/C Issuer and/or (ii) upon five Business Days' notice to
Avnet, terminate the Swing Line, in which case all outstanding Swing Line Loans
shall immediately be due and payable by Avnet. In the event of any such
resignation as L/C Issuer on termination of the Swing Line, Avnet shall be
entitled (subject to the consent of such Lender) to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by Avnet to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer or the termination of the Swing
Line. as the case may be. Bank of America shall retain all the rights and
obligations of the L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Committed Loans or fund participations in Unreimbursed Amounts
pursuant to Section 2.04(c)). If Bank of America terminates the Swing Line, it
shall retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective date
of such termination, including the right to require the Lenders to make Base
Rate Committed Loans or fund participations in outstanding Swing Line Loans
pursuant to Section 2.03(c).
9.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Borrowers;
(g) with the consent of Avnet; (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent or any Lender on a
77
nonconfidential basis from a source other than Avnet; or (i) to the National
Association of Insurance Commissioners or any other similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's or its Affiliates' investment portfolio in connection with ratings
issued with respect to such Lender or its Affiliates. In addition, the
Administrative Agent and the Lenders may disclose the existence of this
Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the other Loan Documents, the Commitments, and the
Credit Extensions. For the purposes of this Section, "Information" means all
information received from the Borrowers relating to the Borrowers or their
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrowers; provided that, in the case of information received
from the Borrowers after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
9.09 COLLATERAL. Each of the Lenders represents to the Administrative
Agent and each of the other Lenders that it in good faith is not relying upon
any "Margin Stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
9.10 ADDITION OF DESIGNATED BORROWERS.
(a) Avnet may at any time designate any Subsidiary of Avnet (an "Applicant
Borrower") as a Designated Borrower hereunder by delivering to the
Administrative Agent (which shall promptly deliver counterparts thereof to each
Lender) a Designated Borrower Certificate executed by the Applicant Borrower and
Avnet together with, in connection with the delivery of the first such
Designated Borrower Certificate, a Guaranty Agreement in substantially the form
of Exhibit G executed by Avnet in favor of the Administrative Agent for the
benefit of the Lenders with respect to the Loans made to any such Applicant
Borrower hereunder and such supporting resolutions, incumbency certificates and
opinions of counsel as the Administrative Agent may reasonably request. Any such
addition of a Designated Borrower shall be effective ten Business Days after the
delivery of such Designated Borrower Certificate to the Administrative Agent.
Such Applicant Borrower shall thereupon become a party hereto and a Designated
Borrower hereunder and shall be (i) entitled to all rights and benefits of a
Borrower hereunder and (ii) subject to all obligations of a Borrower hereunder.
The Obligations of Avnet and each Designated Borrower that is not a Foreign
Subsidiary shall be joint and several in nature. The Obligations of all
Designated Borrowers that are Foreign Subsidiaries shall be several in nature.
(b) Each Subsidiary of Avnet that becomes a "Designated Borrower" pursuant
to this Section 9.10 hereby irrevocably appoints Avnet as its agent for all
purposes relevant to this Agreement and each of the other Loan Documents,
including (i) the giving and receipt of notices, (ii) the execution and delivery
of all documents, instruments and certificates
78
contemplated herein and all modifications hereto, and (iii) the receipt of the
proceeds of any Loans made by the Lenders or the Swing Line Lender, as
applicable, to any such Designated Borrower hereunder. Any acknowledgment,
consent, direction, certification or other action which might otherwise be valid
or effective only if given or taken by all Borrowers, or by each Borrower acting
singly, shall be valid and effective if given or taken only by Avnet, whether or
not any such other Borrower joins therein. Any notice, demand, consent,
acknowledgement, direction, certification or other communication delivered to
Avnet in accordance with the terms of this Agreement shall be deemed to have
been delivered to each Designated Borrower.
9.11 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrowers or any other Loan Party, any such notice being
waived by each Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Lender shall have made demand under this Agreement
or any other Loan Document and although such Obligations may be contingent or
unmatured. Each Lender agrees promptly to notify Avnet and the Administrative
Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
9.12 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to Avnet. In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations.
9.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.14 INTEGRATION. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document
79
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
9.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or Event of Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.
9.16 SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which any Borrower is a party that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.17 TAX FORMS(a) Each Lender that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code (each, a "Foreign Lender")
shall deliver to the Administrative Agent, prior to receipt of any payment
subject to withholding under the Code (or upon accepting an assignment of an
interest herein), two duly signed completed copies of either IRS Form W-8BEN or
any successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrowers pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrowers
pursuant to this Agreement) or such other evidence satisfactory to Avnet and the
Administrative Agent that such Person is entitled to an exemption from, or
reduction of, U.S. withholding tax. Thereafter and from time to time, each such
Person shall (i) promptly submit to the Administrative Agent such additional
duly completed and signed copies of one of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Avnet and the
Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Person by
the Borrowers pursuant to this Agreement, (ii) promptly notify the
Administrative Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (iii) take such steps as shall
not be materially disadvantageous to it, in the reasonable judgment of such
Lender, and as may be reasonably necessary (including the re-designation of its
Lending Office) to avoid any requirement of applicable Laws that the applicable
Borrower make any deduction or withholding for taxes from amounts payable to
such Person. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount
80
equivalent to the applicable withholding tax imposed by Sections 1441 and 1442
of the Code, without reduction.
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all Obligations and the resignation or replacement of the
Administrative Agent.
9.18 REMOVAL AND REPLACEMENT OF LENDERS.
(a) Under any circumstances set forth herein providing that Avnet shall
have the right to remove or replace a Lender as a party to this Agreement, Avnet
may, upon notice to such Lender and the Administrative Agent, (i) remove such
Lender by terminating such Lender's Commitment or (ii) replace such Lender by
causing such Lender to assign its Commitment (without payment of any assignment
fee) pursuant to Section 9.07(b) to one or more other Lenders or Eligible
Assignees procured by Avnet; provided, however, that if Avnet elects to exercise
such right with respect to any Lender pursuant to Section 3.06(b), it shall be
obligated to remove or replace, as the case may be, all Lenders that have made
similar requests for compensation pursuant to Section 3.01 or 3.04. Avnet shall
(x) pay in full all principal, interest, fees and other amounts owing to such
Lender through the date of removal or replacement (including any amounts payable
pursuant to Section 3.05), (y) provide appropriate assurances and indemnities
(which may include letters of credit) to the L/C Issuer and the Swing Line
Lender as each may reasonably require with respect to any continuing obligation
to purchase participation interests in any L/C Obligation or Swing Line Loans
then outstanding, and (z) release such Lender from its obligations under the
Loan Documents. Any Lender being replaced shall execute and deliver an
Assignment and Assumption Agreement with respect to such Lender's Commitment and
outstanding Credit Extensions. The Administrative Agent shall distribute an
amended Schedule 2.01, which shall be deemed incorporated into this Agreement,
to reflect changes in the identities of the Lenders and adjustments of their
respective Commitments and/or Pro Rata Shares resulting from any such removal or
replacement.
(b) In order to make all the Lenders' interests in any outstanding Credit
Extensions ratable in accordance with any revised Pro Rata Shares after giving
effect to the removal or replacement of a Lender, the Borrowers shall pay or
prepay, if necessary, on the effective date thereof, all outstanding Committed
Loans of all Lenders, together with any amounts due under Section 3.05. The
Borrowers may then request Committed Loans from the Lenders in
81
accordance with their revised Pro Rata Shares. The Borrowers may net any
payments required hereunder against any funds being provided by any Lender or
Eligible Assignee replacing a terminating Lender. The effect for purposes of
this Agreement shall be the same as if separate transfers of funds had been made
with respect thereto.
(c) This section shall supersede any provision in Section 9.01 to the
contrary.
9.19 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN MANHATTAN, XXX XXXX XXXX XX XX XXX XXXXXX XXXXXX FOR THE SOUTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
9.20 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
82
9.21 JUDGMENT CURRENCY.
(a) The Borrowers' obligation hereunder and under the other Loan Documents
to make payments in Dollars or any other applicable currency (the "Obligation
Currency") shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Administrative Agent, the L/C Issuer,
the Swing Line Lender or the respective Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent or such
Lender under this Agreement or the other Loan Documents. If for the purpose of
obtaining or enforcing judgment against any Borrower in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
conversion shall be made, at the rate of exchange (as quoted by the
Administrative Agent or if the Administrative Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Borrowers covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate or exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining any rate of exchange for this Section
9.21, such amounts shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
AVNET, INC., as a Borrower
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------------------
Title: Senior Vice President, Chief Financial
--------------------------------------
Officer and Assistant Secretary
--------------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-1
BANK OF AMERICA, N.A., as
Administrative Agent, a Lender, L/C
Issuer and the Swing Line Lender
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
----------------------------------
Title: Managing Director
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-2
ABN AMRO BANK N.V., as a Lender
By: /s/ Xxxxx Xxx
--------------------------------------
Name: Xxxxx Xxx
----------------------------------
Title: Vice President
----------------------------------
ABN AMRO BANK N.V., as a Lender
By: /s/ Xxxxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxx
----------------------------------
Title: Assistant Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-3
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ Maarten Van Otterloo
--------------------------------------
Name: Maarten Van Otterloo
----------------------------------
Title: Managing Director
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-4
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
-- NEW YORK BRANCH, as a Lender
By: /s/ Xxxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-5
BANK ONE, NA, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Assistant Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-6
CREDIT SUISSE FIRST BOSTON, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Asst. Vice President
----------------------------------
CREDIT SUISSE FIRST BOSTON, as a Lender
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-7
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-8
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
----------------------------------
Title: S. V. P.
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-9
KBC BANK, N.V., as a Lender
By: /s/ Xxxx-Xxxxxx Diels
--------------------------------------
Name: Xxxx-Xxxxxx Diels
----------------------------------
Title: First Vice President
----------------------------------
KBC BANK, N.V., as a Lender
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-10
NATEXIS BANQUES POPULAIRES, as a Lender
By: /s/ Nicolas Regent
--------------------------------------
Name: Nicolas Regent
----------------------------------
Title: VP Multinational
----------------------------------
NATEXIS BANQUES POPULAIRES, as a Lender
By: /s/ Xxxxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxx
----------------------------------
Title: VP - Multinational Group
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-11
THE NORTHERN TRUST COMPANY, as a Lender
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------------
Title: Second Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-12
SKANDINAVISKA ENSKILDA XXXXXX XX
(PUBL), as a Lender
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------------
Title: Client Executive
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-13
STANDARD CHARTERED BANK, as a Lender
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
----------------------------------
Title: Senior Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-14
UNICREDITO ITALIANO, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
----------------------------------
Title: First Vice President
----------------------------------
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
----------------------------------
Title: Vice President
----------------------------------
(Signature Page to Credit Agreement (Multi-Year))
S-15
